The ad market continues to rebound from the impacts of marketers’ pandemic pullback and new data from WARC points to a double-digit increase in global ad spending on radio. The firm forecasts worldwide radio ad revenue will increase 10.4% this year or $2.5 billion. WARC estimates total U.S. ad spending will increase 12.7% to $242.5 billion this year.
In the just-release WARC Global Advertising Trends: Ad Investment 2021/22 report shows radio’s growth rate for this year is trailing ad spending growth overall. The firm says global ad spending is on track to increase 12.5% this year to $665 billion. It is projecting another 8.2% gain in 2022 when the global ad market is expected to top $700 billion.
The new research also exposes the scale of the 2020 ad recession. WARC says radio ad spending fell by a fifth last year, as did print, TV and in-cinema ads, equating to the worst downturn for offline media in WARC’s 40 years of market monitoring. Spend online, however, rose by 9.4% last year, buoyed by rising eCommerce (+27.4%), social media (+18.3%) and online video (+15.9%) investment.
“Investment in offline media fell by $63 billion worldwide in 2020, marking the worst year in living memory for the majority of media owners,” said James McDonald, Managing Editor of WARC Data, and author of the report. “All media are forecast to record growth this year, with most sustaining this into 2022. Yet, as has been seen before, it is the online platforms that are set to benefit most from the ad market’s recovery.”
Retail is the largest radio advertiser in the U.S. according to the WARC data and it expects retailers to invest $2 billion this year in the medium. That would be an increase of 14% from 2020. Yet if those numbers hold true, the 2021 investment would be one-third lower than 2019, meaning the impact of the pandemic on radio will not fully be recovered this year in the key ad category.
WARC says financial services will the second largest advertiser on U.S. radio this year, spending $1.6 billion, followed by business & industrial services, spending $1.3 billion.
One reason for the robust outlook is WARC research that shows global ad spending rose 23.6% during the second quarter, reaching $157.6 billion. That was a strongest quarterly gain in more than a decade. It was led by a 31.2% increase in digital ad spending.
Telecom ad spending is one of key drivers, as the quickest growing category pre-pandemic shows no sign of slowing as advertising spend is expected to grow almost twice as quick as the wider ad market in 2021 and 2022. WARC forecast a 21% growth rate this year and then 11% next year.
Retailers may have slashed their ad budgets by $6.2 billion worldwide last year, but they are predicted to grow them by 11% this year. WARC Data’s analysis of company reports also finds that while some retailers were modest in their ad cuts last year, like Amazon (-0.9%) and Best Buy (-2.5%), others were more severe – Walmart (-13.5%) and TJX (-34.5%) cut their ad spend by double-digits in 2020.
Advertising spend from media brands is expected to top $70bn worldwide this year for the first time, growing 18.3% and easily surpassing the mild decline last year. Further growth of 6.9% is expected in 2022, with online media expected to take an almost three-quarters share of total investment, up from one-quarter in 2013.