Coronavirus Fears Could Cost Marketing Investments $11 Billion In Lost Revenues
Disruptions sparked by the coronavirus outbreak could come sooner than later for the advertising market. The Myers Report, part of media-industry knowledge platform MediaVillage, estimates that response to the disease could potentially reduce 2020 U.S. marketing communications investment by, at minimum, $1 billion, but as much as $11 billion.
The Myers Report based its prediction on an analysis of 62 marketing and media categories. It says that if fears over the virus continue to be prevalent beyond the first half of the year, its forecast for 2020 marketing investments will decline from 1.8-percent growth to a 0.1-percent contraction, representing approximately $11 billion in lost revenues. Furthermore, if the outbreak continues into fourth quarter 2020, The Myers Report predicts an additional marketing reduction of $11 billion in 2021, with advertising media’s share of the budget cuts equaling $3.1 billion.
The report projects that media will absorb 28 percent of the marketing cost reductions, with the most significant cuts likely in direct mail/email, experiential/event marketing, mobile and apps advertising, and cinema. Its worst-case scenario for 2020 would leave media and advertising companies with $3 billion in reduced spending. This would reduce year-over-year advertising growth in 2020 to 4.8 percent from an original forecast of 6.2 percent.
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