Dentsu predicts 5.9% growth in ad spend for 2021 in Australia

Dentsu has released its 2021 Ad Spend Report, with the holding group forecasting a 5.9% rise in ad spend across 2021 following a tough 2020.

That figure is slightly ahead of the growth predicted by Dentsu for the global ad market (5.8%), which combined data from 59 markets and expects global ad spend to reach US$579 billion this year.

Ad spend fell by 11.2% in Australia during a pandemic-impacted 2020, and Dentsu forecasts that it may take a few years to claw spend back, with a forecast of 6.2% growth anticipated for 2022.

Dentsu Ad Spend Forecast [click to enlarge]

Growth in the Australian market is on the lower side, with India (10.8%), and the UK (10.4%) set to lead the way in terms of ad spend recovery.

Meanwhile, some countries that were hit hardest by the global pandemic are set to record a slower recovery, with the USA to regain 3.8% and by Russia 3% in ad spend, but all regions are expected to enjoy growth.

Dentsu ANZ’s Media Chief Investment Officer Michael Bass said the industry has become more adaptable to changing landscape, with clients less likely to pull spend entirely in the event of further disruptions and lockdowns.

“2020 shaped how we navigate and respond to global events from an advertising and media investment perspective, in the best interests of our clients,” he said.

“While panic began to unfold in March and clients pulled spend, confidence has since returned with people becoming more adaptable to the changing landscape.

“Rather than pulling spend, clients now simply shift their investment to other channels, or adjust their messaging. This will undoubtedly continue in 2021.

“The Australian market has seen quite a resurgence in ad spend from Q4 last year and those who invested will have momentum with an established brand presence in market. The opportunities that existed for brands to grow during difficult times last year are still here now, and if 2020 showed us anything, it’s better to spend than pull back.”

The report also forecasted growth by category looking ahead to 2021 and 2021, and predicts that digital will account for half of all global spend for the first time.

Social (18.3%), search (11.0%) and video (10.8%) are the categories expected to grow the most.

Dentsu Spend Forecast Categories [click to enlarge]

Bass added: “We’ll naturally see strong growth in Q2 this year but for Australia to see total industry growth, we really need all categories to fire.

“Momentum will continue to build in categories such as retail, food, and gaming, however the big spenders – travel, tourism aggregators, entertainment – haven’t bounced back yet in our market. Until these categories start to spend again, it’s unlikely we’ll see the market return to pre-2019 levels.”


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