The only question was how much would second quarter grow in 2021 when stacked up against a year ago, when the lockdowns shut stores, restaurants and scores of other businesses that are the backbone of ad spending. The answer has arrived. According to Standard Media Index, the U.S. ad market grew 50% during the second quarter. That was an acceleration from a more modest 5% growth rate reported during the first quarter.
The American experience was not unique. SMI says across the English-speaking world the ad market gains were significant. No bigger gain was recoded than in Canada where ad spending was up 77% during the second quarter versus last year. Gains also topped the U.S. in New Zealand (+65%), the U.K. (+54%), and Australia (+53%). Across the five countries the ad market grew by 52% compared to Q2 a year ago.
“In Q1 we could see the first glimpse of the recovery in these advertising markets with the value of collective bookings lifting 5%, but now the market has really taken off with this incredible 52% increase in the second quarter ad spend,” said SMI Global CEO James Fennessy. “Admittedly, this April to June period last year was the most affected by the onset of the COVID pandemic, but on any measure the market has not only recovered from that downturn but has now moved back into growth mode.’’
SMI, which collects and publishes media agency payment ad spend data, has reported a 25% increase in the value of the advertising payment data it collected for the first half of the year among its clients in the U.S., U.K., Australia, New Zealand and Canada.
Underscoring the health of the ad market, SMI says even when stacked up against 2019 numbers there was still growth.
“This time last year I’m sure there would be few commentators expecting such sizable advertising markets to return so quickly to their pre-COVID levels of ad spend, but the fact is the value of U.S. ad spend is now 3% above what it was at this point in 2019,” said Fennessy.
SMI credits product categories such as pharmaceuticals, consumer package goods, technology, financial services and clothing for driving first half advertising growth.
“Obviously, there’s still some large advertiser categories that are continuing to struggle, and across all markets we can see that’s the case for the automotive market, the travel and the entertainment sectors,” said Fennessy. “Retail ad spend was a common growth category across all markets and given the size of that category it also highlights an underlying confidence in the returning growth of these economies.”
SMI says digital media has been the biggest winner in the spending gains so far with the level of digital ad spending at a three-year high in the U.S. It estimates that collective digital ads represented half of all agency buys placed during the first half of the year. That compares to 44% during the same period in 2020.
“The growth in digital media is really the standout story from the COVID recovery,” said Fennessy.