Google and Meta will increase global digital ad spending
6 December 2021
In 2022, global digital ad spending is expected to rise by about 9%.
Elon Musk’s fortune plummets by $15 billion, while Jeff Bezos loses $2.7 billion as tech stocks plummet.
According to two ad industry forecasts released on Monday, the global advertising industry will grow faster this year than previously anticipated, as brands rely more heavily on search engine and social media companies such as Alphabet Inc’s Google and Meta Platforms Inc to reach customers during the pandemic.
Despite a year marked by global supply chain disruptions that delayed products reaching shelves and an Apple Inc user privacy crackdown that many feared would disrupt mobile advertising, brands have continued to advertise online 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, which published an ad expenditure forecast on Monday.
According to Brian Wieser, global president of business intelligence at ad agency GroupM, new businesses formed during the pandemic needed to advertise to find customers, while others likely maintained ad spending to stay in front of consumers’ minds.
GroupM forecasted a 22.5 percent increase in global ad spending in 2021 over the previous year, while Zenith forecasted a 15.6 percent increase – both estimates were revised up from previous estimates.
According to the reports, global digital ad spending is expected to rise by about 9% in 2022.
The expansion has benefited Alphabet, Meta, and Amazon.com Inc, which are major sellers of digital ads and now account for more than half of all advertising spending outside of China, up from close to 40% in 2019.
It also comes as Alphabet and Meta, the company formerly known as Facebook, are both under investigation for antitrust violations in the United States and Europe.
The need for marketers to directly reach consumers has also resulted in the success of retailers such as Walmart, Target, and Kroger in rapidly growing their own ad sales businesses, allowing brands to target more customers using their shopper data. According to Zenith, this type of advertising grew 47% this year to $77 billion and is expected to grow to $143 billion by 2024.
Retail media networks have been in place in China for more than a decade, but their growth in other markets has been remarkable, according to Barnard.
“It has grown explosively out of nowhere outside of China in the last five years,” he said.
