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TRENDS ON THE U.S. ECONOMIC FRONT

AMERICAN COMPANIES BOOST AD BUDGETS

May 4, 2021May 4, 2021

Encouraged by a successful vaccine campaign and consumers’ eagerness to spend, U.S. businesses will increase their advertising outlay by 15 percent this year to $250.7 billion, not including political ads, a global ad-buying firm has predicted.
The rate of growth in ad spending is likely to be the fastest since World War II ended 76 years ago, Brian Wieser, GroupM’s president of business intelligence, said to the Wall Street Journal.
“We are seeing ad surges pretty much across the board as things get back to normal,” Dani Benowitz, U.S. chief for ad-buyer Magna Global, told the WSJ.
“Some of the categories that were most impacted [by the pandemic and shutdown] are starting to pick up again, like travel,” she said.
GroupM expects online platforms to grab 51 percent of ad dollars this year, compared to 44 percent in 2019, and said that percentage might grow in light of Google parent company Alphabet’s surprisingly strong first-quarter performance. (See related story in this issue, “BIG TECH GETTING BIGGER, REAPING GREAT REWARDS.”)
“No one expected the numbers we saw from Google,” Wieser said.
Alphabet’s first-quarter sales were up 34 percent year on year, Facebook’s ad revenues rose 46 percent, Snap’s revenues gained 66 percent, and Pinterest’s 78 percent.
Newspaper and magazine ads will continue to lose market share, GroupM predicted, and television ad buys should grow by 9 percent this year, although the medium will continue to lose customers to the Web.
Anheuser-Busch Inbev, the world’s largest brewer, is shifting more of its ads online because television’s audience continues to shrink and digital ads allow the company to “be more flexible and efficient” in disbursing its ad budget, U.S. marketing director Marcel Marcondes told the WSJ.
Although viewers are drifting away, TV networks report stronger ad sales this year as Wieser predicted.
“The demand across lots of different categories signals a pretty healthy market,” Marianne Gambelli, Fox Corp.’s president of ad sales, commented to the WSJ.
TREND FORECAST: TV audiences will continue to decline as younger generations abandon the old medium and the older adults die off… and so, too, will ad sales.

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