WARC Forecasts $660 Billion Ad Market, Return to Growth for TV

Global advertising spend is set to rise by 7.1 percent to $660 billion this year, according to WARC, with traditional media expected to record gains for the first time since 2011, boosted by a return to growth for TV.

Traditional media, combined, are expected to record 1.5 percent growth to $324.2 billion, marking the first rise since 2011. The traditional media total is expected to be boosted by a return to growth for TV, with spend set to rise 2.5 percent to $192.6 billion. This counts for 29.2 percent of all global spend this year. It only partially reverses a 4.4 percent slip in 2019. A third of the global TV total is transacted in the U.S., where TV spend is set to increase by 4 percent to $62.9 billion (some $4 billion will come from presidential campaigns).

Advertising revenue for the “duopoly” (Alphabet and Facebook) is forecast to reach $231.9 billion in 2020, having topped the TV total for the first time in 2019. Alphabet’s ad income is forecast to rise by 10.5 percent to $149 billion worldwide (with YouTube expected to earn $18.5 billion for Alphabet in 2020). Facebook’s ad revenue is projected to rise by 19 percent to $82.9 billion.

North America is forecast at 8.4 percent total market growth this year to $250.3 billion, following a 4.5 percent rise in 2019. AsiaPac advertising spend is expected to rise 7.5 percent to $205 billion in 2020, with China (up 9.7 percent to $98.5 billion), Japan (3.2 percent to $40.2 billion), Australia (2.4 percent to $13.3 billion) and India (15.6 percent to $11.2 billion) all poised to record annual growth. European adspend is forecast for a 6.9 percent rise to $158.7 billion this year, with France leading key market growth at 10 percent (to $18.2 billion). In Latin America, which is heavily susceptible to the strength of the U.S. dollar, a 2.5 percent drop is forecast this year, with Brazil recording a 4.3 percent dip to $14.3 billion. In the Middle East, spending is expected to fall 1.7 percent to $12 billion. In Africa, adspend is expected to rise 5.6 percent to $6.9 billion, reversing a 1.5 percent slip in 2019.

James McDonald, managing editor of WARC Data and author of the research, said: “Internet ad growth has been far stronger than the state of the global economy would suggest, rising seven times faster on average since 2015. But, regulation aside, online platforms are bound by the law of large numbers, and revenue growth is easing for key players like Alphabet and Facebook.

“We are yet to amend our forecasts in light of the COVID-19 situation, as we would expect—if the crisis is contained—displaced spend to be reallocated later in the year. Advertising’s relationship with GDP is strong, but a slowdown in economic output as a result of the virus will not necessarily translate into reduced advertising investment. If events such as the Tokyo Olympics and UEFA Euro 2020 tournament are postponed or canceled, however, we would expect a notable impact.”