The global advertising industry appears well poised for growth in 2021 after being hit by the COVID-19 pandemic last year when businesses and organizations had to cut down on ad spend to mitigate the impact of the crisis. Per a report by advertising firm dentsu, global advertising investment is estimated to
grow 5.8% to $579 billion in 2021, following a decline of 8.8% last year. Notably, Western Europe, Asia-Pacific and North America are expected to see robust growth figures of 7.5%, 5.9% and 4%, respectively.
The report mentioned that the return of major sporting events that were delayed last year because of the pandemic, should become significant drivers of growth for ad spend. Notably, the TV is set to benefit from such live events as advertisers will look to capitalize on the huge global audiences that the sporting events draw. Ad spend on TV, which accounts for a third of the global ad spend, is estimated to increase 1.7% globally to $169 billion. Moreover, the report stated that industry sectors that were hit hard by the pandemic last year are also set to make a comeback. Notably, sectors like travel and transport, media and entertainment, and automotive are set to grow 28.4%, 14.5% and 13.8%, respectively, this year.
Digital Advertising to Lead the Way
As the pandemic forced people to stay at home, advertisers saw an accelerated shift to digital ad spending. The report mentioned that this shift to digital advertising is also expected to endure this year. Moreover, dentsu predicted that digital advertising will account for half of the entire ad spend for the first time in 2021. In fact, per another
report by Mordor Intelligence, the online advertising market is estimated to witness a CAGR of 21.6% during 2020 to 2025 and reach $982.82 billion by 2025. Factors like technological advancement along with increasing digital spending by enterprises are set to drive growth during the forecast period.
Moreover, the report stated that convenience and portability are leading consumers to prefer smartphone devices over laptops and desktops as similar operations can also be performed on smartphones. This is expected to drive the growth of mobile platforms for advertising. Notably, the report stated that North America occupies the highest market share for online advertisement due to rising investments associated with digital ads as well as the region being “highly aware and matured, in terms of smartphones and online activity.”
3 Stocks to Buy Now
Global investment in advertising seems poised to turn around as the industries that were impacted by the pandemic last year will look to increase their spending. Moreover, factors like the resumption of live sporting events should also aid the growth in ad spend. Meanwhile, digital advertising will look to continue its good run and occupy a significant part of the total ad spend. This seems to be a good time to invest in stocks that can make the most of this expected rebound in advertising spend. Hence, we have selected three such stocks that carry a Zacks Rank #2 (Buy). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. The Interpublic Group of Companies, Inc. ( IPG Quick Quote IPG - Free Report) provides advertising and marketing services worldwide. The company offers consumer advertising, digital marketing, communications planning and media buying, and so on. The Zacks Consensus Estimate for its current-year earnings increased 5.9% over the past 60 days. The company’s expected earnings growth rate for the current year is 13.3%. Facebook, Inc. ( FB Quick Quote FB - Free Report) develops products that enable people to connect and share with friends and family through mobile devices, personal computers, and so on. Notably, the company offers its Facebook for Business allowing businesses to advertise on their platform. Users can create and run campaigns using self-service tools and track the performance of ads with easy-to-read reports. The Zacks Consensus Estimate for its current-year earnings increased 9.3% over the past 60 days. The company’s expected earnings growth rate for the current year is 11.8%. Omnicom Group Inc. ( OMC Quick Quote OMC - Free Report) , together with its subsidiaries, provides advertising, marketing and corporate communications services. The Zacks Consensus Estimate for its current-year earnings increased 4.2% over the past 60 days. The company’s expected earnings growth rate for the current year is 17.6%. Bitcoin, Like the Internet Itself, Could Change Everything
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