The U.S. ad market has already begun to recover from 2020’s record declines, according to a new report from Standard Media Index. First quarter ad spend lifted 4% above the total recorded in Q1 2020 and 2% above the pre-COVID Q1 2019 period. The new numbers come from SMI’s core database, which accesses actual spend from the world’s largest media agency buying groups and independents and reflects $90 billion in ad spending across all media types.
Among media channels, digital experienced 23% growth in media investment when compared to Q1 2020. Within digital, audio had the largest year-over-year growth at +36%, followed by social media (+30%), video (+23%), content (+19%), and search (+13%).
Consumer electronics led the top growth category groups for total U.S. ad spend in first quarter, surging 29% year over year, followed by Retail with an 18% improvement and Consumer Packaged Goods up 14%. Automotive (+11%) and Wellness (+10%) also posted double-digit gains. Other verticals on the upswing in Q1 were Financial Services (+7%), General Business (+4%), Pharmaceuticals (+4%) and Technology (+3). While Travel/Tourism (+44%) and Entertainment (+16%) took expected plunges, it was Government ad spending that fell the most (-66%). Modest dips were seen in Apparel & Accessories (-7%) and Restaurants (-3%).
Compared to all media, category gains in digital were more frequently positive, reaching double digit growth in a range of categories, led by CPG (+45%), Retail (+43%), and Wellness (+41%). Government (-60%) and Travel/Tourism (-27%) registered the biggest declines.
While linear radio ad spending fell 23% year over year in the U.S., it notably improved to a single digit variance in March.
Looking across the Anglo markets of the U.S., UK, Australian, NZ and Canadian markets, ad spend jumped 4% above Q1 2020 levels and improved 1% above the Q1 2019 period. SMI CEO James Fennessy said that if the trends identified in the report continued across the year, the final result for 2021 could be a 7% increase in total advertising expenditure.
“Given the level of economic disruption from the COVID pandemic it’s phenomenal to see such a positive increase in advertising expenditure back to pre-COVID levels even before the global pandemic has been arrested,’’ he said. ``It clearly highlights the resilience of the advertising industry in these key markets and points to a healthy future for all ad-supported media.’’
The Q1 results have been boosted by a very strong March across all Anglo markets (+18% in total) after small declines in January and February. But in March strong rebounds in the U.S. and Canada (+22% and +20% respectively) underpinned the global gains, SMI says, with NZ reporting the next highest level of percentage growth (+9%) followed by Australia (+2%) and the UK (+0.4%).
“The highest growth we’ve seen this quarter is for the Digital media with total bookings up +22% on the 2020 numbers as all the key Digital sectors delivered large double digit percentage growth and the highest gains seen in the Programmatic, Social Media and Video Sites sectors,’’ Fennessy said. “And when compared to the first quarter of 2019 Digital spend has grown an even stronger +25%. Indeed, first quarter ad spend for all Digital sectors exceeded the 2019 and 2020 totals in every country.’’