Ad Spending to Drop 9.1 Percent Globally in 2020, 7.0 Percent in U.S.: Forecast
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Zenith says ad spending is "beginning to return" after the coronavirus pandemic hit and sees digital advertising attracting more than half of total global ad spend this year, earlier than forecast.

Global advertising expenditure will decline 9.1 percent in 2020 driven by the coronavirus pandemic, including a 7.0 percent drop in the U.S., according to the latest forecast from media planning firm Zenith on Monday. In comparison, ad spend fell 9.5 percent during the 2009 recession, it noted.

"The U.S. has been relatively resilient, benefiting from record political spending in the run-up to the presidential elections in November," the company explained.

It also highlighted how the pandemic has accelerated a shift to digital advertising. “The coronavirus forced brands to embrace digital advertising even faster than expected and made digital transformation of businesses more urgent than ever,” said Jonathan Barnard, Zenith’s head of forecasting. "This year will be the first in which digital advertising will attract more than half of total global ad spend, a milestone we previously expected in 2021.” 

Zenith also said that ad spending is "beginning to return," forecasting a 5.8 percent gain for 2021, boosted by the rescheduled Summer Olympics in Tokyo and UEFA Euro soccer championship. "Advertisers pulled back spending sharply when the scale of the coronavirus crisis became clear. The steepest declines took place between March and May, with timing varying by country. These declines have now started to ease and are expected to gradually moderate over the rest of the year." 

According to the firm, the pandemic has also brought long-term changes to the retail and e-commerce sectors, with the latter having become "a lifeline for consumers, providing the goods they need while unable or unwilling to visit bricks-and-mortar stores."

Zenith noted a similar "digital acceleration spurred by social distancing and new behaviors," explaining: "Consumption of digital media, along with television, spiked in the early weeks of lockdown. Although both are now trending down again, they are not expected to retreat to pre-crisis levels any time soon. Together with the rise of e-commerce and data, this has driven a rapid shift in media budgets from traditional to digital media, accelerating the trend that was already taking place."

The firm now forecasts that digital advertising will account for 51.0 percent of global ad spend this year, up from the 49.5 percent forecast in December. "Zenith does not expect any of this share to return to traditional media as the crisis
eases – digital advertising’s market share is forecast to reach 54.6 percent in 2022," it also suggested.

The recovery of traditional media, meanwhile, "will be patchy and underpowered," the company said. "Among traditional media, television and radio suffered the least, expected to end the year only slightly below the market, with 11 percent and 12 percent respective declines. The crisis exacerbated the long-term decline of print advertising as newspaper ad spend is forecast to shrink by 21 percent globally this year and magazine ad spend drops 20 percent."

Zenith also expects cinema advertising to shrink by 25 percent in 2020.

 

 

From: THR