Ad Revenues to Fall 8 Percent in 2020

Global adspend will fall by 8.1 percent this year to $563 billion, according to WARC, due to marketers slashing their budgets in response to the COVID-19 pandemic.

Earlier this year, WARC had projected a 7.1 percent growth rate for global adspend in 2020.

Television will see a 13.8 percent decline to $159.9 billion, accounting for 28.4 percent of global adspend. Internet advertising will be flat. Social media is expected to rise by almost 10 percent and online video 5 percent to $50.3 billion, about 9 percent of the total ad pie.

WARC notes that the projections for this year are actually better than the ad declines seen in 2009, when the ad market contracted by 12.7 percent.

“In the U.S., the spending cuts from most industry verticals will be mitigated by the incremental political spend in this presidential election year,” said Vincent Letang, executive VP of global market intelligence at MAGNA Global.

“While we reduced our political ad forecast as fundraising will be affected by the economic crisis, spend is still expected to grow significantly on the previous presidential cycle, with almost $5 billion (up 26 percent versus 2016) more invested, including an extra $1 billion going into digital.”

In North America, ad investment is expected to fall by 3.7 percent to reach $222.5 billion. AsiaPac will see a 7.7 percent reduction to $173.5 billion in 2020, with big decreases in China, Japan and Australia. In Europe, WARC predicts a 12.2 percent fall to $129.9 billion, including major declines in France (18.7 percent), the U.K. (16.4 percent), Germany (6.1 percent), Spain (6 percent), Italy (21.7 percent) and Russia (12.3 percent). The ad market will fall by 20.7 percent in Latin America to $21.4 billion, led by Brazil. The Middle East, which has been less impacted by COVID-19, will still see ad revenues drop by 15.1 percent to $10.4 billion due to falling commodity prices. WARC predicts African ad spend will be $5.3 billion in 2020, a 19.5 percent decrease.