Digital ad spending in Canada will be more than double traditional ad spending for the first time this year. That means digital will account for 68.3% of the total ad market.
That comes from the latest eMarketer Insider Intelligence report, conducted with MiQ.
Digital’s share of Canada’s total ad market has been climbing for years and in 2018 actually outstripped that of traditional media for the first time. Just a few years later, eMarketer expects in 2022 advertisers will spend more than twice as much on digital as on traditional formats as a result of the shift toward digital during the pandemic and increasing media consumption on mobile devices.
Traditional media spending will change slightly in 2022. While the market fell 20.5% in 2020 and posted only 5.1% growth in 2021, the report predicts that this year spending on traditional formats will be flat. Pre-pandemic, it was expected that strong TV, radio and OOH ad spending would bolster the traditional media market. Unfortunately, radio and OOH were hit hard by the pandemic due to dramatic declines in commuting and foot traffic across downtown cores and transit hubs.
This year, eMarketer predicts mobile will make up 79.0% of the digital market, and the Google-Meta duopoly accounting for 67.8% of the digital ad spend. Social media, digital video and search are primary destinations for brands’ ad budgets. Meta’s dominance in social with Facebook and Instagram, and Google’s grip on video with YouTube and on search, will continue for years to come.
According to the forecast, nearly four in five digital ad dollars will come from mobile in 2022. The majority of digital spending will be earmarked for consumption on mobile devices. Consumers’ preference for using social media on mobile devices is largely driving this trend, but so are mobile searches – particularly “near me” searches, which have skyrocketed over the years.
Connected TV spending this year will be about one-third of that for linear TV – but that will increase each year through 2024 when it reaches 44.2%. Next year, CTV ad spending in Canada will exceed $1 billion, up almost seven times over what it was five years ago. The report says that in the long term, budget diversion from linear to CTV will boost the TV market as a whole.
Canada ranks among the highest-spending nations in terms of digital and eMarketer projects that this year, it will rank fourth in digital as a percentage of total ads spending among the 30 countries and territories covered in the eMarketer global forecasts. Only China (81.5%), the UK (77.2%), and the US (71.9%) will rank higher.
Overall, ad spending will outpace GDP over the next few years. It is estimated that total ad spending will increase by 7.2% year over year to reach C$18.00 billion ($14.35 billion) in 2022. That’s in line with the 7.9% GDP growth projected by the International Monetary Fund (IMF). For the next two years, eMarketer forecasts total ad spending growth to be 8.6% and 8.7%, respectively, more than triple IMF projections for GDP gains.
Technology, apparel, and CPG topped the list of industries with the fastest digital ad spending growth. According to data from the Standard Media Index (SMI), technology brand ad spending on digital formats was up 92% in 2021 relative to 2019 as a pre-pandemic baseline. Apparel and accessories saw that spending go up 72% over the same period, and consumer packaged goods (CPG), up 64%. Sectors on the other end of the spectrum were travel services, down 19% between 2019 and 2021, and automotive was flat.
