NEWS28 May 2020

Global ad investment forecast to drop 8.1%

Asia Pacific Covid-19 Europe FMCG Latin America Media Middle East and Africa News North America Retail Trends UK

GLOBAL – Advertising spend is forecast to fall 8.1% globally this year due to the Covid-19 pandemic, according to research from Warc.

Times Square outdoor billboards_crop

Spend on advertising is projected to be $563bn in 2020, down $96.4bn from the level previously forecast by Warc in February.

The estimate is based on data from 96 countries. Warc previously forecast that the market would grow 7.1% globally this year.

The report predicts that investment in traditional media will decline to $51.4bn (-16.3%) and that online advertising will see a $36.5bn cut compared with Warc’s February forecast, stalling growth (+0.06%).

Warc forecast that almost all of the 19 product categories it monitors for the report would record a fall in ad spend this year, with travel and tourism hit hardest (-31.2%).

However, the slump is not forecast to be as large a decline as that recorded in 2009, when the global ad market contracted by 12.7% after the financial recession. The report also predicted that spending during the US presidential campaigns will soften the market decline there.

James McDonald, head of data content, Warc, and research author, said: "We note three distinct phases to the current downturn: firstly, an immediate demand-side induced paralysis for sectors such as travel, leisure and retail, combined with supply-side constraints for CPG brands. Second, the recessionary tailwind will exert extreme pressure on the financial services sector as well as the consumer, whose disposable income is now heavily diminished.

"Finally, as the world takes tentative steps towards a recovery, there will be an added emphasis on healthcare and wellbeing credentials among brands not normally associated with the field, aside higher spending within the pharmaceutical sector to leverage the shifting consumer mindset."