WARC is part of specialist information, data and analytics effort that brings evidence to the heart of marketing decisions.
In a series of reports it availed to AMEinfo, WARC draws a picture that portrays the efforts behind global brand building, ad spend growth and the trends and categories where this happens. We organized a summary in this article.
Brand-building remains important in the digital economy, as demonstrated by the growing investment in brand advertising by FAANG companies (Facebook, Amazon, Apple, Netflix, Alphabet’s Google), which now account for 4% of the total global ad spend, per WARC Data.
Conny Braams, Chief Digital & Marketing Officer, Unilever, comments: “Strong brands do well in e-commerce. The convergence of media, entertainment, and commerce offers many exciting opportunities for brands to grow… Brands need to provide unmissable services, content, and experiences.”
Apple has gained market share in the countries where it already dominates (the UK, the US, China, Australia for example).
Only 26% of Apple users allow app tracking when prompted – this falls to just 16% in the United States.
Amazon and Apple extend lead as most valuable brands; Amazon has taken the top spot as the most valuable brand for the third year running while Apple has placed in the top two every year since 2011.
Tesla, TikTok and Pinduoduo are quickest growing brands; Tesla has seen its brand value almost triple and it is now the most valuable brand in the cars category. Chinese-owned apps TikTok and Pinduoduo have also seen rapid growth in brand value (Chinese companies play a major role in the top ten growing apps)
More than half of Twitch, Snapchat and TikTok users are aged 18-24; Twitch is most popular with those aged between 18 and 24 (61% of its users are in this age group), followed by Snapchat (57%) and TikTok (54%). Facebook and YouTube attract a broader audience, with just 31% and 34% of their users aged 18-24.
In 2020, there was an ad recession. While total spend fell by 5.4% spend on offline media such as print, radio, TV, and cinema fell by a fifth, or $63 bn, equating to the worst downturn for this sector in WARC’s 40 years of market monitoring.
Spend online, however, rose by 9.4% ($29.2 bn) last year, buoyed by rising e-commerce (+27.4%), social media (+18.3%) and online video (+15.9%) investment.
Global advertising spend is on course for 12.6% growth this year to reach $665 billion, an upgrade from 6.7% initially projected, as the global ad market rebounds strongly from the COVID-19 downturn of last year, finds WARC, the international intelligence service.
Further growth of 8.2% is forecast for 2022, by when the global advertising market will be worth more than $700 bn.
New quarterly research from 100 markets by WARC finds that advertising spend in Q2 2021 rose 23.6% to a total of $157.6 bn.
Growth in the second quarter was driven mostly by online formats, which collectively saw spend rise by 31.2% versus the previous year. e-commerce (+59.5%) and search (+50.6%) were star performers, though offline media – most notably linear TV (+11.5%) – also fared well.
The Q2 rise in global ad trade followed on from 12.5% growth in Q1. Consequently, at $311.5 bn, global ad investment was 17.8% higher during the first six months of the year than during the same period in 2020.
Online formats are leading the growth in 2021, with WARC forecasting spend on e-commerce advertising to rise 35.2% this year, mostly to the benefit of Amazon. Brand spend on search where Google is the largest player is set to rise by over a quarter (26.2%) this year, while online video spend is expected to be up by 17.7% and social media by 13.1% this year. All of these formats are expected to record growth in 2022, too.
In the Middle East and following a one-quarter decline in spend last year, regional advertising growth will be 6.2% this year and will then accelerate to 15.1% in 2022. This puts total investment at $13.2 bn next year, $1.2bn less than the pre-pandemic level in 2019.
Trends by media and format 2021/2022
Linear TV: Spend is projected to grow 7.1% – or $11.1bn – to $168.1bn this year, equal to a quarter (25.3%) of the global ad market. Investment is expected to rise by a further 2.7% in 2022, though this means only 60% of 2020’s losses will be recovered by 2022.
Out of home: Double-digit growth is expected in both 2021 (17.4%) and 2022 (11.2%) as the medium recovers from the lowest level of investment in over a decade. This year will see $34.9bn being spent and this is set to rise to $38.8bn next year, though this still leaves the market $2.6bn short from 2019’s level of investment.
Cinema: Spend was heavily curtailed in 2020 and a strong recovery looks underway. Cinema is forecast to be the fastest-growing medium in both 2021 (149.9%) and 2022 (26.9%), taking total investment to $3.4bn next year.
Linear radio: Investment in radio ads is projected to increase by double-digits (10.4%) – or $2.5bn – this year. However, spend in 2022 will largely be flat (0.8%) to a total of $26.6bn.
Newspapers: Advertising spend on print newspapers will rise by 4.8% this year, the first growth recorded in a decade. This puts the total at $29.6 bn, before a mild decline of 1.0% is projected for 2022.
Magazines: Investment is expected to rise by a modest 2.5% this year before declining 4.3% next year. This means magazine brands in 2022 will have recovered just 5% of 2020’s lost advertising revenue.
Social media: Social formats, combined, were among the strongest performers in 2020, recording total growth of 18.3% to a total of $99.2bn. Social spend is set to rise by 13.1% in 2021 and a further 10.1% in 2022, by when the market will be worth $123.5bn – approaching a fifth (17.2%) of all advertising spend worldwide.
Online video: Online video spend rose 15.9% to reach $54.9bn in 2020. Growth is forecast to accelerate to 17.7% this year, with a rise of 15.9% predicted in 2022.
e-commerce: Brand spend on e-commerce platforms lept 27.4% last year as shoppers migrated online in response to social distancing guidelines. Advertising growth in this sector is now expected to accelerate to over a third (35.2%) in 2021, pushing the market’s value to a total of $85.2bn. Further growth of 11.4% is forecast next year.