2020 Expected To Be A Difficult Year For Global Ad Spending

Global advertising spending is projected to drop 10.2 percent in 2020 as traditional media report an extremely bad year. WARC, a data, information and analytics company, expects advertising spending to dip $63.4 billion in 2020 to $557.3 billion. In its “Global Advertising Trends: State Of The Industry 2020/2021” report, WARC expects the global ad market to take at least two years to recover. It forecasts spending to increase 6.7 percent in 2021—representing the recovery of only 59 percent of 2020’s losses—and it would have to increase a further 4.4 percent in 2022 to return to 2019’s $620.6 billion in spending.

“2020 was the most hostile year the advertising economy has ever seen in our 40 years of market monitoring,” says James McDonald, head of data content at WARC, and author of the research. “Some platforms—such as ecommerce and social properties—have emerged relatively unscathed, but the vast majority of the media landscape has witnessed a severe material impact. An immediate bounce back is not on the horizon. Rising unemployment is set to depress consumption demand well into next year, and though the prospect of a vaccination program offers cause for optimism among consumers and businesses, it may only be a waypoint in a recovery that stretches years.”

Looking at specific product categories, automotive is expected to see the largest drop in absolute spending, by approximately $14.8 billion, while travel and tourism will lose the largest proportion of advertising spending, at 33.8 percent. Next year, while all categories are projected to increase spending, only telecoms and utilities (10.6 percent), media and publishing (8.4 percent) and business and industrial (5.3 percent) are expected to exceed their 2019 spending.

Examining specific media and formats, linear TV—“classic” TV aired at scheduled times and channels, includes DVRs—is expected to dip 16.1 percent ($29.9 billion) to $155.6 billion. Despite U.S. campaign spending, the U.S. TV market still slipped a tenth of a point to $54.5 billion. Globally, the segment is expected to grow just 1.1 percent in 2021.

Out-of-home ad spending is projected to be down 27.3 percent ($11.3 billion) in 2020; cinema advertising will down by almost one-half, linear radio will be down 18.4 percent, newspapers will be down 25.5 percent, magazines down 25.4 percent and paid search will be down 1.9 percent. Social media is set to climb 9.3 percent in 2020 to $98.3 billion and online video will be up 7.9 percent to $52.7 billion. Online video is expected to be the fastest-growing format in 2021, up a further 12.8 percent.

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