What you need to know:

• The global advertising market has grown by more than 11 per cent this year, reaching US$669 billion in 2021.
• According to Publicis-owned Zenith, the Australian market will grow 9.1 per cent.
• The majority of growth is in the e-commerce and online video markets, with digital advertising now 58 per cent of the total.

Advertising spend in Australia will grow by 9.1 per cent this year, ROI agency Zenith says, a strong rebound but below the global average due to slow recovery in traditional channels.

Part of Publicis Groupe, Zenith published its latest Advertising Expenditure Forecasts report, predicting ad spend will reach US$669 billion globally in 2021 – 11.2 per cent above last year’s pandemic-impacted market.

Digital advertising has grown substantially, this year making up 58 per cent of the market, up from 48 per cent in 2019. E-commerce and online video advertising are the main drivers of the global ad market.

In Australia, total ad spend is forecast to grow by 9.1 per cent in 2021, five per cent below 2019 investment levels. Zenith said Australia's market was worth A$16.43bn in 2019, A$14.29bn in 2020, and will be worth A$15.59bn this year. 

This, however, is without taking into account the latest wave of Covid and new lockdowns.

“The ad spend recovery this year has been quicker and stronger than expected, particularly across television and digital,” Zenith’s National Head of Investment, Elizabeth Baker, said.  

“We have yet to understand what, if any, impact the latest series of lockdown restrictions will have on ad revenue and our forecasts are predicated on an assumption that restrictions will be relatively short-lived and will not lead to another media revenue crash, as seen in 2020. 

“It’s likely that TV will reach 2019 levels of investment, while digital was the only channel not to decline in 2020 and is continuing to surge in 2021. Other channels may not see 2019 levels of ad spend until 2023.”

With current restrictions, Australia is forecast to see digital ad spend grow by 6.6 per cent compared to last year, and rise 8.8 per cent from pre-COVID 2019.

“Although search growth has slowed at 2-3 per cent versus 9 per cent pre-COVID, performance media spend is being diversified into growth channels like ecommerce marketplaces and social platforms catering to inspiration and shoppable experiences,” Zenith’s National Head of Digital & Data, Joshua Lee, said.

Globally, ad spend is expected to continue to build, with 6.9 per cent forecast for 2022 and 5.6 per cent for 2023. The US will account for almost half of global growth in 2021.