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Digital & TV steer ad industry's recovery to pre-pandemic levels in 2021: dentsu

Print, cinema, OOH and radio to take a longer time to recover

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MUMBAI: India has emerged as one of the top five markets with high year-on-year growth rate in advertising spends, said dentsu in its latest Global Ad Spend Forecast June 2021. After suffering a steep 12.9 per cent decline in 2020, the ad spend is expected to bounce back with 10.8 per cent growth in 2021, according to the report.

The forecast suggests the overall ad spend will reach $ nine billion this year, and expand further by 12.4 per cent in 2022. The growth will largely be led by Television and Digital, as Print, Cinema, OOH and Radio are expected to take a longer time to recover.

According to the data, Television continues to remain the most popular and resilient media in India, retaining a 40.9 per cent share in ad spend despite the pandemic. The medium also showed a 7.7 per cent spike in growth, as compared to the 2020 spend. Digital’s share of spend has grown rapidly, from 20.0 per cent in 2019 to 29.4 per cent in 2021, and is expected to reach 32.7 per cent by the end of 2022

India in top 5 mkts-denstu

The bi-annual report based on data from 59 markets, anticipates a full recovery for the global ad market in 2021, with spends exceeding pre-pandemic levels sooner than was previously forecast. 

While 2020 remains the weakest performing year since the global financial crisis, the decline in growth during 2020 has improved since the January 2021 forecast from -8.8 per cent to -7.2 per cent. The pandemic-induced decline in global advertising spend during 2020 has also proved less severe than anticipated, it states. The overall ad market outlook for 2021 shows recovery with 10.4 per cent growth and a spend of $634 billion, which represents an improvement of 4.6 percentage points over January 2021 prediction.

Ad-spend in APAC

Overall, the ad spend in APAC is expected to grow by eight per cent, with Australia and India showing higher growth rates in 2021 compared to other countries. In APAC, the 6.2 per cent rise in digital spend last year is likely to grow by 12.8 per cent in 2021 to reach $124.5 billion, representing a 54 per cent share of total ad spend. 

Regional live events such Tokyo Olympics and Paralympics Games will remain significant drivers of growth in Linear TV ad spend in APAC (3.9 per cent increase in 2021 to reach $59.2 billion). The report also indicates a shift towards CTV (Connected TV) and OTT (Over The Top). With audiences moving more towards digital media consumption, Linear TV spend will remain below pre-pandemic levels until beyond 2021.

With gradual lifting of restrictions on social activities, OOH will bounce back post impact of the pandemic, rising 7.5 per cent in 2021 in the region. Cinema has a slightly longer recovery, with a further decline in 2021 (-5.0 per cent) but expected to bounce back in 2022. Radio will also see growth (4.3 per cent) in 2021.

While most channels will return to growth in 2021 (Cinema in 2022), Print is seeing a slight decline in 2021 (–2.7 per cent) and expected to continue declining in 2022, as it evolves towards new modes of digital delivery.

Meanwhile, government spending remained a key growth area, supporting the Covid vaccine rollout and other related initiatives. In APAC’s key markets, the travel and transport sectors, will still be affected by the uncertainty of the past year and see a muted increase in demand (4.9 per cent), while Media & Entertainment is forecast to see growth (9.7 per cent).

dentsu International APAC CEO Ashish Bhasin said, “It is promising to see a return to growth in the APAC region with two of our markets in the top five contributors of ad spend growth; China and Japan. While China continues to see strong levels of growth driven by Digital and OOH, Japan’s growth will be buoyed by events like the 2020 Olympic & Paralympic Games, and the House of Representative elections and the advertising spend associated with it, particularly in TV.

By market, the top five contributors to the $ 59.7 billion of growth in incremental ad spend during 2021 will be the US, China, UK, Japan and Australia. The US share of ad spend remains significantly above all other markets in 2021. The highest growth rates in 2021 are forecast to come from spend in India, Canada, the US, Australia and the UK.

Media APAC CEO & Media Singapore MD Prerna Mehrotra said, “We are optimistic that the region will bounce back to positive growth in ad spend, with some channels likely boosted higher than pre-pandemic levels. The main drivers behind the growth is economic recovery, with the APAC GDP set to increase by 7.3 per cent, and a stronger-than-ever push to digital marketing.”

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