Report: Australian ad spend to grow 9.1 per cent in 2021

Latest Zenith Advertising Expenditure report highlights strong gains made in next-gen digital and social advertising, shares caveat on Covid's 2021 impact

Australia’s advertising spend is expected to grow by 9.1 per cent in 2021 as the sector makes a quicker and stronger recovery than expected but will still trail 2019 investment levels as some channels take longer to bounce back from the global pandemic.

That’s one of the top-line findings from the latest Zenith Advertising Expenditure Forecasts report, published this week and focused on both global and local advertising trends. Overall, the report is expecting global advertising expenditure to reach US$669 billion this year, $40bn more than what was spent prior to Covid’s arrival last year.

The report also claims expenditure will remain robust in the medium term, with 6.9 per cent growth forecast in 2022 and 5.6 per cent in 2023 worldwide.

In Australia, Zenith is expecting ad spend to grow 9.1 per cent in 2021, but trail 2019 investments by about 5 per cent. This equates to advertising expenditure of US$10.5bn nationally in 2021.

Zenith head of investment, Elizabeth Baker, noted some channels are experiencing a slower recovery than others, even as the overall space rebounds. However, what’s becoming increasingly apparent is the latest series of lockdown restrictions will also impact ad revenue and forecasts. Zenith’s forecasts are based on relatively short-lived lockdowns, which are looking increasingly unlikely in Greater Sydney.

“We have yet to understand what, if any, impact the latest series of lockdown restrictions will have on ad revenue and our forecasts are predicated on an assumption that restrictions will be relatively short-lived and will not lead to another media revenue crash, as seen in 2020,” she commented.

“It’s likely that TV will reach 2019 levels of investment, while digital was the only channel not to decline in 2020 and is continuing to surge in 2021. Other channels may not see 2019 levels of ad spend until 2023.”

Digital was indeed a strong category and is expected to grow 6.6 per cent compared to last year and rise 8.8 per cent on pre-Covid levels, Zenith reported. Within this, online video is continuing to grow over traditional static display – the latter is forecast to shrink by 15 per cent this year, while online classified grows by 4 per cent.

Zenith national head of digital and data, Joshua Lee, said such figures give the team confidence digital consumption and the total Internet market is poised for sustained growth of between 5 and 6 per cent over the next three years.

While search growth had slowed to 2-3 per cent compared to 9 per cent pre-Covid, performance media has diversified and is buoyed by growth channels such as ecommerce marketplaces and social platforms expanding into shoppable experiences.

“With a rising emphasis on mid- to-lower funnel, building brands across all channels should not be forgotten and seen as an advantage in the shift to digital commerce. Leaning into high attention and emotion eliciting channels, like online video and social media, can help brands consistently create future demand as the market fully recovers and accrues competition,” Lee continued.

Zenith is forecasting social media advertising will expand by 25 per cent this year to reach US$137bn globally, overtaking paid search in scale for the first time. Paid search will expand by 19 per cent to reach US$135bn.

The agency also pointed out a sizeable portion of this spend is new money to the ad market, coming from small businesses that were required to pivot to ecommerce to survive lockdowns. Some of the money going into display and search advertising is also budgets brands would previously have allocated to retailers to secure physical shelf-space.

Overall, Zenith expects digital advertising to grow by 19 per cent in 2021 and increase its share of total ad spend to 58 per cent, up from 48 per cent in 2019 and 54 per cent in 2020.


Another highlight from Zenith’s report is that audiences continue to migrate online, and online video viewing is growing rapidly. The agency is predicting online video advertising will be the fastest-growing digital channel in 2021, rising by 26 per cent to reach US$63bn.

By contrast, cinema and out-of-home, the worst affected channels by Covid, are looking at respective growth rates of 116 per cent and 16 per cent, Zenith said. Radio advertising, which decreased by 22 per cent in 2020, is forecast to grow 4 per cent this year, while TV, which fell 8 per cent in 2020, is looking at 1 per cent growth in 2021. Print, which has declined for 14 consecutive years, is predicted to have an 8 per cent drop in ad spend this year.

Zenith’s report also analysed media pricing off the back of recovery plus migration of audiences to digital channels. It found TV advertising increased 5 per cent this year on average, online video inflation averaged 7 per cent and social media is flat.


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