Saturday, July 11, 2020
Home / Analysis / Global Ad Revenues to Drop 7 Percent in 2020

Global Ad Revenues to Drop 7 Percent in 2020


ADVERTISEMENT

According to MAGNA’s latest advertising forecasts, revenues will drop by 7 percent to $540 billion this year due to the COVID-19 pandemic.

MAGNA says there will be double-digit declines in linear ad sales (linear television, print, linear radio, out-of-home and cinema). Linear ad sales will fall 16 percent to $238 billion. Digital advertising, meanwhile, will be relatively stable, inching up 1 percent to $302 billion.

Linear television ad revenues will see a 12 percent drop due to the weakness of demand, the cancellation of many TV campaigns and the postponement of major sports events. However, linear TV viewing was up by 10 percent to 40 percent during the lockdown. MAGNA expects linear TV viewing will return to “long-term erosion” in the second half of the year.

By region, EMEA and LatAm will see the biggest declines, shrinking by 10 percent. AsiaPac will be down 8.5 percent. North America, thanks to the 2020 U.S. presidential election, will be more resilient. MAGNA projects U.S. ad revenues will fall 4.3 percent this year.

The markets hardest hit will be Japan and Spain (both down 14 percent), France (down 13 percent) and Italy (down 15 percent). India, China and the U.S. will be less affected.

In 2021, the global economy will recover and major sporting events, including the Summer Olympics and the EURO football tournament, are expected to return. As such, global ad spend will rise by 6.1 percent in 2021 to $573 billion, with a 7.1 percent gain in EMEA, 8.1 percent in AsiaPac, 6.7 percent in LatAm and 4 percent in North America. Even with this rebound, the global marketplace will remain $9 billion smaller than its pre-COVID level, MAGNA reports.

“Beyond the short-term V-shaped recession/recovery impact on the economy and the advertising market, the COVID crisis will have global and long-term effects on society, business models, consumption habits, mobility and media usage, all factors pointing to a more subdued economic growth and advertising spend than previously forecast for the 2022-2024 period,” said Vincent Létang, executive VP of global market intelligence at MAGNA and author of the report. “MAGNA thus reduces its global advertising growth forecast for these three years, from +4.5 percent per year to +3.5 percent per year. The global ad market will reach $647 billion by 2021 compared to $745 billion in our previous long-term scenario (a 14 percent decrease).”











About Mansha Daswani

Mansha Daswani is the editor and associate publisher of World Screen. She can be reached on [email protected]

ALSO READ

Video: Reed MIDEM’s Laurine Garaude on MIPCOM 2020 Plans

Laurine Garaude, the director of the television division at Reed MIDEM, spoke to Anna Carugati, World Screen’s group editorial director, via video conference about “getting back to business” with a hybrid physical and digital program for this year’s MIPCOM and MIPJunior.