GroupM has revised its outlook on the US ad industry, expecting it to grow 15% in 2021, thanks in large part to stimulus spending.
2020 was a difficult year for advertisers, as the global pandemic impacted all sectors of the economy. GroupM had previously predicted a 12% growth in the industry in 2021.
The company is now predicting a 15% increase, thanks to increased spending as a result of the latest stimulus package. Even more significantly, this represents a 6% increase over 2019 levels, indicating the industry will fully rebound from the pandemic in 2021.
Our upgrade of expectations is primarily a reflection of the healthier-than-expected recovery of the economy from the depths of the pandemic paired with the significant impact of fiscal stimulus the federal government is providing to consumers. Digital advertising is the primary beneficiary of trends impacting the economy, both because new small businesses are forming at a record pace (even if collectively they may be losing share of activity within the economy) and because large businesses are increasingly focused on e-commerce, with spending shifts to digital media generally aligning with this trend.
GroupM originally factored the vaccine rollout into its projections, but the Georgia Senate races made the American Rescue Plan Act of 2021 a reality, adding to the recovery.
GroupM’s report is welcome news for the advertising industry, and the economy at large.