Zenith Projects Faster-Than-Expected Ad Recovery

Zenith has revised its advertising forecast for this year, projecting a 7.5 percent decline, an improvement on the company’s previous warning of a 9.1 percent drop in 2020.

Global adspend will reach about $587 billion this year, Zenith says in its latest Advertising Expenditure Forecasts. Its upgraded forecast for 2020 is led by expected gains in e-commerce and online video.

For 2021, Zenith anticipates global adspend will be up by 5.6 percent to $620 billion, thanks in part to the delayed Summer Olympics and EURO tournament. However, 2021 revenues will still be lower than the $634 billion generated in 2019. By 2022, adspend will be up to $652 billion, a 5.2 percent year-on-year gain.

Zenith’s forecasts are based on a global economic recovery as a vaccine rolls out into 2021.

Digital’s share of global adspend will be 52 percent this year, up from 48 percent in 2019. This is expected to rise to 58 percent by 2023. Zenith also has a bullish forecast for online video adspend, propelled by increased use of AVOD services. Between 2020 and 2023, online video ad expenditure is set to increase by 8.4 percent.

By region, meanwhile, AsiaPac and CEE are expected to bounce back to 2019 levels next year. Zenith forecasts adspend in both regions will shrink by 6 percent in 2020 and grow by 7 percent in 2021. North America will be down 5.3 percent this year, with advertising around the U.S. elections helping to alleviate the impact of COVID-19 reductions in ad spend. Next year the market will be up just 3.3 percent, with a return to pre-pandemic levels in 2022. Western Europe is projected to be down 12.3 percent this year, with much of the region not returning to 2019 levels until 2023. LatAm will be down 13.8 percent this year, surpassing 2019 levels in 2022. MENA will take a 20 percent hit this year even by 2023 will still be below 2019 levels.

“The global ad market has been recovering from its Q2 nadir throughout the rest of this year,” said Jonathan Barnard, Zenith’s head of forecasting. “The prospect of multiple effective vaccines gives us confidence that adspend growth will continue in 2021 and beyond, returning the market to 2019 levels in 2022.”