Ad market bouncing back faster than expected fueled by digital video

Anne Freer | December 8, 2020

Mobile Advertising

The advertising market may be recovering quicker than previously assumed, with online video leading much of the growth.

That’s according to new figures from Zenith Media.

The latest forecast reveals that the global ad market is predicted to shrink 7.5% to $587 billion in 2020, that’s down from 9.1% in June.

Global ad spend will then grow 5.6% to $620 billion in 2021 and by 5.2% in 2022.

Digital ad spend is estimated to rise 1.4% in 2020 to make up 52% of total ad spend, up from 48% in 2019. This change is driven by a growing number of brands adopting digital and mobile strategies in the wake of the COVID-19 pandemic.

eCommerce sales are estimated to rise 25% in 2020 while store sales took a 5% hit.

Brands also boosted spending on digital to promote and drive traffic to their own eCommerce operations. This growth is likely to continue even once things return to normal.

“Retail platforms are powering their growth by putting pressure on brand margins. Their focus on bottom out price wars, and enhanced consumer experiences, benefit consumers while brands bear the cost,” says Ali Nehme, Global Chief Commerce Officer, Publicis Groupe.

“In this scenario, brands must flex their own power, by selecting retailer partners who offer demonstrable value through transparent data and measurement, as well as the ability to deliver the consumers who will drive much needed category growth.”

Retail media advertisers will spend $51 billion on ads in 2020, up 46% year on year.

Search and social were up 8% and 14% respectively.

As consumer viewing habits changed, so have advertising habits. A higher number of consumers viewed content on platforms like Netflix and Disney+.

Meanwhile, demand for ad-funded video on demand has been increasing on connected TV sets.

“Now that it offers mass reach in key markets, it’s the right time for brands to invest in connected TV,” said Christian Lee, Global Managing Director at Zenith. “Brands should use connected TV for both branding and performance, exploiting its high ad recall and full targeting and tracking capabilities to drive awareness and sales conversions at the same time.”

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