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Digital Ad Spending Poised for Exceptional Growth

With consumers flocking online during COVID-19, demand for digital ads should be strong in 2021 and beyond.

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  • We expect online ad spending to grow 20% next year and at a 14% average rate for 2022-24. By comparison, we expect total ad spending to increase 10.5% next year and at a 9% average rate for 2022-24.

While it has bounced back more quickly from the pandemic than we expected a few weeks ago, total ad spending is still likely to decline in 2020. We expect the market will return to solid growth next year, though, powered by the expansion of e-commerce and consumer time spent online that the pandemic has fueled, coupled with a return to economic growth. We believe higher digital ad spending on direct-response (or bottom-of-the-funnel) campaigns and the return of more upper-funnel brand marketing will drive advertising budgets higher through 2024, leaving traditional ad channels like television competing for a stagnant revenue pool.

Ali Mogharabi does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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