Global advertising spend is set to shrink 9.1% this year, matching to levels recorded during the 2009 recession (9.5%), according to Zenith’s Advertising Expenditure Forecasts report as the Coronavirus pandemic continues to impact marketing budgets.
However, according to the forecasts, the drop in ad spend is starting to ease and gradually growing over the remaining half of 2020 and into 2021.
As the scale of the pandemic came clear, advertisers pulled back spending sharply. The steepest declines took place between March and May, with timing varying by country.
However, Zenith forecasts a 5.8% recovery in global ad spend in 2021, boosted by the rescheduled Summer Olympics and UEFA Euro 2020 football championship.
Breaking ad spend down by country, the US has been relatively resilient, benefiting from record political spending in the run-up to the Presidential elections in November.
US ad spend is expected to decline by just 7% this year, proving it’s resilience and benefiting from the record political spending in the run-up to the Presidential elections.
Meanwhile, Asia Pacific is forecast to shrink by 8%, thanks to the success of some markets in keeping the virus under control. Advertisers in Western Europe cut spend aggressively in Q2, and ad spend is forecast to shrink by 15%.
Zenith forecasts 8% decline in Central and Eastern Europe, 13% in Latin America and 20% in MENA in 2020.
Transition to digital
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. Zenith forecasts predict that digital advertising will account for 51.0% of global ad spend this year, up from the 49.5% it forecast in December.
Furthermore, digital ad spend is forecast to shrink by just 2% across 2020 as a whole. 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% in 2022.
The recovery of traditional media will be slower than expected, although the likes of television and radio are expected to end the year only slightly below the market, with 11% and 12% respective declines.
Elsewhere, newspaper ad spend is forecast to shrink by 21% globally this year with magazine ad spend to drop 20%.
Unsurprisingly, out-of-home and cinema have suffered the most from government restrictions on movement, and consumers’ avoidance of public places. Out-of-home advertising is forecast to shrink by 25% in 2020 and cinema by 51%.
“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,” he added.