As the global ad industry begins to rebound from the pandemic-induced decline, Canada is expected to be among the world’s three fastest-growing markets this year, according to the latest ad spend forecast from Dentsu.
After contracting by 9.6% last year, the Canadian ad market is expected to grow by 14% to US$10.5 billion this year, exceeding pre-pandemic spending levels by 3%.
Year-over-year data suggests “increased optimism” for recovery, says Dentsu, driven by the return of hard-hit categories like travel and entertainment, as well as what it describes as “positive developments” in vaccine rollout.
Dentsu says the Canadian market is expected to “fully recover” this year, with further 9.2% market growth to US$11.4 billion expected during 2022. This year’s recovery will be driven by 15.6% growth in digital ad spend, representing 59.7% of spending.
Based on data from 59 markets, Dentsu predicts that advertisers will spend US$634 billion this year, with all geographic regions expected to return to growth. The U.S., China, the, U.K. and Japan alone are expected to generate a combined US$59.7 billion in incremental spending this year. Spending will also continue to rise in 2022, reaching US$680 billion.
Looking at individual media, digital will continue to be the industry pace-setter this year, returning to double-digit growth of 15.6%, and total spend of US$311 billion. Linear TV will maintain its 30.3% share of global spend, with expected growth of 7.1% driven by the European soccer championships and the Tokyo Olympics.
After a “significant impact” in spend levels resulting from the pandemic, out-of-home spending is expected to increase by 14.6% to US$34.4 billion this year. Growth will be driven by the return of both passenger and foot traffic, complemented by “expanding opportunities,” with digital, personalization and programmatic central to delivery.
On a category basis, the report also says that government spending remains a “key area” of growth, as countries and municipalities support the Covid vaccine rollout and related initiatives. Spend in auto advertising is also expected to grow by 9.5% this year after contracting by 15.2% in 2020.
The report also contains some brand recommendations, including the fact brands that consistently reinforce a social responsibility dimension in their identity will win consumer trust, with leaders working collaboratively and beyond their industry to deliver large scale change.
It also notes that the rise of ecommerce has created a “different playing field” for brands, which must now ensure they communicate not only the strength of their products and services, but also the strength of their online experience and customer service to leverage earned media coverage to its full potential.