Will the advertising market rebound in 2021?

2020’s pandemic brought on a dramatic drop in sales for the advertising industry. But with the election this year and an increase in digital advertising, there could be an advertising market rebound. According to Magna, total ad sales in the U.S. decreased by 7.2 percent in the first and second quarters of 2020. But as our economy reopens and the election approaches, multiple industries are set to make a full recovery by 2021. Currently, 8 of 10 key industry verticals are on track to rebound by 2021, with slowing declines already becoming evident in the second half of 2020.

As for 2021, Magna predicts that a gradual return to normal life will help stabilize the ad industry and encourage more media buys. In 2021, finance, entertainment, technology and restaurant verticals are projected to see an increase in ad spending. Meanwhile, with unemployment rates still at an all time high, automotive and travel may continue to struggle in the new year.

Advertising market rebound

We will begin to see the upward spending trend through the third and fourth quarters of this year, as both Democrats and Republicans spend money on political advertising ahead of the November presidential election. The mass PAC investment in the Trump and Biden campaigns will make 2020 a record-setting year. With year-over-year total political ad spending will increase by 32 percent, or $5 billion, compared to the 2016’s figures. This is good news for local TV networks, who saw a significant drop in airtime buys earlier this year.

In addition to political spending, digital advertising will make up most of the media buys this year. With most Americans staying at home and working remotely by mid-March, eyeballs went to screens. According to Magna, digital advertising now makes up approximately 55 percent of the total U.S. ad market. This could indicate a long-term shift toward a more digital-centric economic and media environment in the U.S.

Carolina Macedo, the author, is Project Coordinator of Marketing Keys.