Coming off pandemic-driven declines in 2020, the U.S. advertising and live entertainment sectors are poised for strong rebounds in 2021.
The KPMG Office of the Chief Economist is forecasting 6.8 percent growth in U.S. GDP this year, boosted by pent-up demand, strong consumer savings, and relaxed monetary policy.1
In the advertising market, media companies are reporting a robust, checkmark-shaped recovery in spending that’s arrived faster, and with greater strength, than the aftermath of the 2009 recession or other recent economic shocks. S&P Global forecasts the U.S. advertising market to reach $265.8 billion by 20232, they have also updated their 2021 U.S advertising focus, and are now expecting 8.8% growth, in part due to double-digit growth in digital3.
Live Events Bringing Crowds Back
Live events and entertainment are returning at uneven rates today but are poised to roar back with a robust expansion in the second half of 2021. Consumers are excited about heading out to live events, and the sector is eagerly scheduling performances.
According to a PredictHQ survey, 71 percent of consumers are looking forward to attending large events again, with 58 percent saying they’re more likely to attend an in-person event after being vaccinated.4
Cities and venue operators are trying to come back as quickly and safely as possible. Broadway shows, which set attendance (14.8 million patrons, according to the Broadway League) and revenue ($1.83 billion) records in 2019, have started selling tickets for full-capacity performances starting in mid-September.5 And event promoters are reporting pent-up demand, with robust sales for concerts in the latter half of the year as artists return to the road and venues ramp up operations as quickly as safely as they can.6
Although the costs of safety protocols and enhanced security measures may be unpredictable for venues and event promoters, consumer interest will be high for live entertainment. The sector should enjoy pricing power as demand for entertainment will outstrip supply, and companies may be able to reach revenue levels above pre-pandemic highs.
Keys to Success
Consider the following measures to navigate fast-changing advertising markets:
- Advertisers - Review your spending plans and return on investment across various channels.
- Agencies - Reallocate resources toward growing channels and sectors such as streaming video, and right-size declining areas. This will mean an even-heavier emphasis on digital channels and capabilities.
- Platforms – Monitor the market to identify and target customer and industry segments that are outpacing others in spend
For live event operators, it will be critical to balance supply, demand, and costs:
- Expand supply/capacity as local restrictions allow to meet increasing demand. Be creative, perhaps by blending in-person attendance with virtual live streams.
- Identify pricing opportunities, such as offering premium packages, and blending tickets with other “extras.” Beware of a price-gouging backlash.
- Manage costs and carefully plan ahead to secure enough safety equipment and supplies for increased traffic and demand.
Despite some short-term uncertainly, surging growth in today’s ad markets and strong signs of pent-up demand for live sports and entertainment all indicate an impressive recovery in the second half of 2021 and beyond.
- KPMG, A Tale of Two Economies, April 21, 2021
- S&P Global December 20, 2020
- S&P Global, April 12, 2021
- PredictHQ.com Blog, April 14, 2021, Vaccine Impact Report: The State of Travel and Live Events
- Forbes.com, The Market Sure Thinks Live Events Are Coming Back Strong Rob Salkowitz, February 26, 2021