Ad spend in China to grow 8.5% in 2021

dentsu releases its 2021 forecast on Global Advertising Spend (Ad Spend). The twice-yearly report combines data from 59 markets and anticipates that all regions will enjoy positive growth in Ad Spend in 2021. Ad spend in China, ranked the second biggest market following the U.S, is expected to grow 8.5%, up to ￥722.7 billion, an increase of 3.2% compared to our Q1 forecast (5.3%). Ad Spend is predicted to grow by 6.9% in 2022.

• Global advertising spend is expected to grow by 10.4% to US$634bn 
• Ad Spend in China is expected to grow 8.5%，ranked as the second largest globally, expected to reach US$111.6bn (￥722.7 bn)
• APAC Spend will rise past pre-pandemic levels, a year sooner than previously predicted
• Digital continues to drive recovery, expected to represent 70% share of the total ad spend in China, and represent 50.0% share of globally
• All regions forecast to return to growth in 2021 with Canada, the US and Australia expected to be fastest growing markets in 2021

Simon Zhong, VP of Research and Data Analysis, dentsu Media, said："As China's economy continues to grow, we are observing signs of a rapid rebound in Advertising. The main drivers of this recovery are Internet services and the food and beverage sector, with spends in digital and outdoor media playing a huge role. With this revitalised consumer confidence and activity, we are increasing our Q1 Ad Spend forecast by 3.2% to 8.5% in 2021''.

The pandemic-induced decline in global advertising spend during 2020 has proved less severe than anticipated, with some trends which emerged during the past year remaining. The 4.0% rise in digital spend last year is forecast to grow by 15.6% in 2021 to reach US$311.0 billion, representing a 50.0% share of global ad spend. Forecasts for Social (23.0%) and Video (17.0%) will also rise, with Search also growing (16.3%) reaching US$110.1 billion in 2021.

Linear ad spend will also see a return to growth globally 6.3% to US$311.9bn, following a 14.8% decline in 2020, however it is predicted that spend levels will remain below pre-pandemic levels in 2021. Most channels will return to growth in 2021 with the exception of Print, seeing a slight decline (–4.4%) on a global level as it continues to evolve towards new modes of digital delivery.  With restrictions lifting on social activity, Cinema and OOH will see a bounce back post impact of the pandemic, rising 35.1% and 14.6% respectively. Radio will also see growth (10.4%) driven by digital Audio and TV (7.1%).

While live events such as the UEFA European Football Championships and Olympic and Paralympic Games Tokyo Olympics and Paralympics continue to be a significant driver of growth in Linear TV ad spend (7.1% increase in 2021 to reach US$188.4 billion), the dentsu report data suggests a shift towards CTV (Connected TV) and OTT (Over The Top) and audiences moving more towards digital media consumption mean global Linear TV spend will remain below pre-pandemic levels until beyond 2022. 

Looking at the industries who will see growth in ad spend this year, it will come as little surprise that Government spending remains a key growth area, supporting the Covid vaccine rollout and other related initiatives. The travel and transport sectors, although still affected by the uncertainty of the past year, will see an increase in demand (8.7%). Media & Entertainment is forecast to see growth (8.9%) and Automotive advertising to rise (9.5%).

While 2020 remains the weakest performing year since the global financial crisis, the decline in growth during 2020 has proved less severe than anticipated. In 2021, the market is seeing a recovery in growth (10.4%), an improvement (4.6% pts) on January’s predication.  Looking to 2022, recovery is set to continue when spending is likely to reach US$680 billion and grow at a rate of 7.2%.

Deric Wong, CEO, dentsu China, said: "Consumer confidence is high, and as a result, we are experiencing a rapid recovery in the China market that even surpasses pre-pandemic levels. Our latest Ad Spend report reveals China Market and Global development trends and insights for brands operating in today's post-pandemic Global arena."

The dentsu Ad Spend Report can be viewed here.

Notes to Editors：

Advertising expenditure forecasts are compiled from data collated from dentsu’s brands and based on our local market expertise until the second half of June 2021. We use a bottom-up approach, with forecasts provided for 59 markets covering the Americas, EMEA, Asia Pacific and Rest of World by medium: Linear Television, Newspapers, Magazines, Radio, Cinema, Out-of-Home and Digital Media. The advertising spend figures are provided net of negotiated discounts and with agency commission deducted, in current prices and in local currency. For global and regional figures, we convert the figures centrally into USD at the May 2021 average exchange rate. The forecasts are produced bi-annually with actual figures for the previous year and latest forecasts for the current and following year all restated at constant exchange rates.