Digital ad spend to climb by 6.6% in 2021

2021 is proving itself to be just as interesting and maybe a little more dramatic than 2020. Now that all of us are back working from home, it certainly feels like déjà vu but, with the recent release of the IAB’s PwC Online Advertising Expenditure Report, hopefully it is with a lot less uncertainty. Not only did digital ad spend for 2020 reach $9.5 billion (with almost $3 billion of that sitting in Q4), but this digital ad spend was in fact 2% higher than the previous year. Looking to categories that performed particularly well; retailers held a record share of digital ad spend over the last quarter of 2020. That’s a whopping 18.5% compared to 11.7% the previous year.

Understandably, advertising by the auto categories dropped to 12.4% in 2020, an almost 10% drop from 2019. Of particular note for the IAB, publishers have seen an increase in the amount of inventory purchased through programmatic means. In 2020, this spend accounted for 44% of display revenue which is a huge leap from the 36% seen in 2019. That means, we’ve seen a generous investment from clients, media agencies and trading desks buying via PMP’s and guaranteed deals, as well as real-time bidding.

The question on everyone’s lips is, how did the first half of 2021 shape up? Well it may be too soon to tell, but Zenith’s latest Advertising Expenditure Forecasts predict that ad spend will grow 9.1% this year. With a continuing migration of businesses to online, Australia is forecast to see digital ad spend alone climb by 6.6% in 2021. Research from We Are Social and Hootsuite in February of this year showed that our time spent on the internet has increased from only a year ago. While most of us spent an average of 5 hours and 41 minutes on the internet in February 2020, we now spend close to 6 hours and 13 minutes. This means we’re spending close to 40% of our waking hours scrolling and streaming and online shopping. Overall, it’s a resounding recovery for the digital market and should bring us confidence going into the second half of 2021.

Sources: IAB Australia Online Advertising Expenditure Report, Zenith’s Advertising Expenditure Forecast July 2021, Digital 2021: Australia – We Are Social & Hootsuite

By Sarah Morgan

Director of Ad Ops & Supply