Ad spend growth in Australia could outpace the rest of the world in 2021, according to forecasts by analysts at GroupM.
WPP's media agency is forecasting 25% growth in ad spend in Australia next year following a deep slump from the pandemic fallout in 2020.
This Year, Next Year, GroupM’s twice yearly global ad spend forecast, outlines a 19% decline in ad spend this year.
“While severe to be sure, 2020’s decline can still be considered ‘modest’ given the scale of the impact of the pandemic on global GDP, which will fall by much more than it did in the 2009 global financial crisis," says GroupM.
Recovery is on the way, according to GroupM's forecasts. However, the agency's calcualtions assume a vaccine will be developed and distributed in the first half of next year.
The forecast sits well with the current outlook by economists at investment banks.
J.P. Morgan, in a note toi clients, says: "Evidence is building across the globe that economies are pulling out of the COVID-19 collapse more quickly than expected."
The picture in Australia is encouraging, with a range of activity data pointing to an earlier turn, they say.
"Despite this positive shift, our economists still see the recovery being a drawn-out affair, with near-term GDP estimates raised but medium-term expectations downgraded. The biggest threat to the recovery remains a second wave," says J.P. Morgan.
But the recovery will be uneven across the world.
"Expectations for 2021 diverge somewhat given a wide range of expectations and potential outcomes for different markets
around the world next year," says the GroupM report.
"In some, the economic consequences of 2020 will outlast the discovery of a vaccine. In others, pent-up demand is expected to over-compensate for 2020’s losses."
Overall, groupM expects global advertising to grow by 8.2% next year on an ex-U.S. political basis, or by 5.9% including it. The median market is expected to grow by 10%.
Among the top 10 markets, most expect to see double-digit growth including Japan (15%), the U.K. (12.6%), Germany (10.6%), Brazil (15%) and Australia (25.2%).
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.