The outlook for digital audio advertising continues to brighten according to ad giant Magna. It has released an updated forecast for 2021 advertising revenue and it now projects digital audio advertising will grow 7.5% this year. That is a half-point improvement over its earlier forecast released in December. “Digital ad formats will capture two-thirds (67%) of total advertising sales for the first time,” said Magna in the latest update.

“Our final estimate for U.S. advertising revenues in 2020 confirms that digital marketing was not only resilient but thrived in the COVID, as the organic growth factors all accelerated,” said Vincent Letang, EVP of Global Market Intelligence at Magna, and author of the report. 

But it is not just digital audio that is improving. Magna also forecasts broadcast radio revenue will increase 2.1% this year, up from an earlier 1.4% projection. 

Overall, Magna says audio combined is on track to be up 5% in 2021, including broadcast radio, streaming, and podcasting.

Beyond audio, Magna has increased its outlook for 2021 across all forms of advertising. It forecasts U.S. ad spending will increase 6.4% to $240 billion this year. That is 2.3% above the previous Magna forecast published in December due to a stronger economic outlook, supported by the new stimulus package, declines in COVID rates, and a return to normal sports events.

“The latest economic and business outlook for 2021 gives us confidence that most industry verticals will grow ad spend again, up and down the funnel, and that will benefit nearly all media channels this year,” said Letang.

On a quarter-by-quarter basis, Magna estimates first quarter ad spending will be up 6% from a year ago, and by a much stronger 15% during second quarter against historical lows set last year during the pandemic’s early days. It projects another 6% growth rate in third quarter, with a more modest 2% gain expected during the fourth quarter. 

The strongest ad spend growth rates will come from Travel, Automotive, Drinks, and Movies, following heavy ad budget cuts in 2020,” the report says. It notes the total ad market is recovering more quickly than during the 2008-2009 recession which saw nine consecutive quarters of ad declines compared to just one during the pandemic. 

Magna has also published its final estimate for the U.S. media owners’ net ad revenues in 2020 that shows even “greater resilience” than previous estimates. It says the ad market was essentially stable in 2020 with a 1% growth rate. Non-political growth was also better than expected, declining by just 2% thanks in part to what Magna says was an “exceptionally strong” fourth quarter due to economic stabilization, strong holiday sales, and record political spending in October.