Global Advertising Industry Increases In 2021, Google And Facebook Dominate Online Advertising

Online advertising is now growing and growing rapidly. (photo; pixabay)

JAKARTA – The global advertising industry will record higher growth this year than previously predicted. It's even likely to continue in 2022.

Many brands are now relying more on search engines and social media companies such as Alphabet Inc's Google and Meta Platforms Inc. to reach customers during the pandemic, according to two ad industry forecasts released on Monday, December 6.

Although this year was marked by supply chain disruptions around the world delaying products from hitting shelves and user privacy restrictions by Apple Inc that many feared would disrupt mobile advertising, brands continue to advertise online and promote e-commerce for in-store shopping.

"But the policy has been slow to return to normal because of the ongoing pandemic," said Jonathan Barnard, director of global intelligence at advertising firm Zenith, as quoted by Reuters.

New businesses formed during the pandemic, need the help of advertising to find new customers. Others are likely to keep advertising spending on the back of consumers' minds, said Brian Wieser, global president of business intelligence at ad agency GroupM.

GroupM expects global ad spending to grow 22.5% in 2021 from a year earlier, while Zenith forecasts 15.6% growth. Both estimates were revised up from previous expectations.

"This is probably the fastest-growing year in terms of the advertising industry," Wieser said at the UBS conference on Monday. Global advertising spending is expected to grow by about 9% by 2022, according to the report.

The growth is a boon for Alphabet, Meta, and Amazon.com Inc, a major digital advertising agency and which now accounts for more than half of all advertising spend outside China. That number has increased from close to 40% in 2019, GrupM said.

It also comes as Alphabet and Meta, the company formerly known as Facebook, are both facing antitrust investigations in the United States and Europe.

The need for marketers to reach consumers directly has also led to the success of retailers such as Walmart, Target, and Kroger to rapidly develop their own advertising sales businesses.

This allows brands to use their shopper data to target more customers. This form of advertising grew 47% this year to a total of $77 billion and is expected to grow to $143 billion by 2024, according to Zenith.

Retail media networks have been established in China for more than a decade, but growth in other markets has been remarkable, Barnard said. "In the last five years, it has grown explosively from nowhere outside of China," he said.