GLOBAL – Global advertising spend is forecast to fall by 10.2% in 2020, according to Warc’s global advertising trends report.

The projected 10.2% decrease in advertising spend to a total of $557.3bn is due to a sharp contraction in investment from the automotive, retail, and travel and tourism sectors, according to the report. 

The market could take up to two years to recover, with a 6.7% forecasted rise in advertising spending for 2021 only able to offset 59% of losses incurred this year. A 4.4% rise in 2022 would be needed to return to pre-Covid-19 levels of ad spending.

The findings are based on data from questionnaires sent to media owners, industry bodies and monitoring organisations in 100 markets worldwide, and is a projection based on those responses.

If the $4.9bn in campaign spending during the US election was not included in the figures, the global advertising market would have fallen 11%, or $68bn, this year, according to the report. Warc said the figures were worse than the 2008 recession in real terms, and 2020 was almost double the rate when adjusted for inflation.

Nearly all of the advertising market decline in 2020 was in traditional media, which fell by a fifth to $253.9bn. Linear television was the worst hit, down 16.1% to $29.9bn.

Cinema (-46.5%), out of home (-27.3%), newspapers (-25.5%), magazines (-25.4%) and radio (-8.4%), along with TV, all recorded their worst performance in the 40 years Warc has monitored the advertising market.

Online advertising was relatively flat, with a drop of 0.3% to $303.3bn. Online video was the only ad format to have its prospects upgraded by Warc, rising 7.9% to $52.7bn.

Automotive ad spending fell by a fifth or $11bn, and retail saw a decline of 16.2% or $10.5bn. Travel and tourism was down by more than a third or $8.4bn. Government and the not-for-profit sectors were the only industries to increase spending on advertising during 2020.

Latin America was the hardest-hit region, with advertising spending plummeting 32.3%. Europe (-14.5%), Africa (-23.3%) and the Middle East (-20.2%) were also severely affected b y Covid-19, although advertising spending held up better in North America (-4.3%) and Asia-Pacific (-9.7%).

James McDonald, head of data content at Warc, said: “2020 was the most hostile year for the advertising economy ever seen in our 40 years of market monitoring.

“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 programme offers cause for optimism among consumers and businesses, it may only be a waypoint in a recovery that stretches two years.”

@RESEARCH LIVE

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