Dec 6, Reuters - The global advertising industry will notch higher growth this year than previously anticipated and is likely to continue its streak in 2022 as brands are relying more heavily on search engine and social media companies such as Alphabet Inc's Google and Meta Platforms Inc's Google and Meta Platforms Inc to reach customers during the epidemic, according to two ad industry forecasts released on Monday.
Despite a year marked by worldwide supply chain disruptions that delayed products from reaching shelves and a user privacy clampdown by Apple Inc that many feared would disrupt mobile advertising, brands have continued to advertise online and promote ecommerce, as in-store shopping has been slow to return due to the ongoing pandemic, according to Jonathan Barnard, director of global intelligence at advertising firm Zenith.
Brian Wieser, Global President of Business Intelligence at GroupM, said that new businesses formed during the epidemic had to advertise to find customers while others kept ad spending in front of consumers' minds.
In the last year, GroupM predicted global advertising spending to grow 22.5%, while Zenith predicted growth of 15.6%. Both estimates were revised up from previous expectations.
This is the fastest-growing year in the advertising industry, according to Wieser at the UBS conference on Monday.
Growth has been a boon for Alphabet, Meta and Amazon.com Inc., major sellers of digital ads, and now account for more than half of advertising spending outside of China, an increase from close to 40% in 2019, GroupM said.
It comes as Alphabet and Meta, the company formerly known as Facebook, are facing antitrust investigations in the United States and Europe.
The success of retailers like Walmart, Target and Kroger has led to the success of their advertising sales businesses by using their shopper data to target more customers. This form of advertising grew by 47% this year to $77 billion and is expected to grow to $143 billion by the year 2024, according to Zenith.
Barnard said that the growth in other markets has been remarkable because retail media networks have been established in China for more than a decade.
He said that it has grown explosively out of nowhere outside of China for the last five years.