Global advertising spend is expected to have fallen by 10.2% ($63.4bn) to $557.3bn in 2020, as traditional media had its worst year on record. Newspapers and magazines will be down by 25% this year with little or no improvement forecast for 2021. After a year that for many publishers has seen record increases in subscriptions, it emphasises the accelerating shift of print media towards readership and away from advertising revenue.
The Ascential-owned forecaster WARC says it will take at least two years for the global ad market to recover fully. A forecast 6.7% rise in 2021 will only recoup 59% of the 2020 losses; the market would need to grow by 4.4% in 2022 to match 2019’s peak of $620.6bn.
The forecaster says: “2020 was the most hostile year for the advertising economy ever seen in our 40 years of market monitoring. Some platforms – such as e-commerce and social properties – have emerged relatively unscathed, but the vast majority of the media landscape has witnessed a severe material impact. An immediate bounce back is not on the horizon. Rising unemployment is set to depress consumption demand well into next year, and though the prospect of a vaccination programme offers cause for optimism among consumers and businesses, it may only be a waypoint in a recovery that stretches years.”
Advertising categories: big bounce in travel-tourism
WARC forecasts that travel and tourism will see the strongest rebound in spending at 20% — a seeming response to the expected vaccines after ad spend had plunged almost 34% this year.
Automotive will see the greatest fall in absolute spending in 2020, losing £11bn, travel & tourism the biggest proportional fall at -33.8%. All product categories are set to increase advertising investment next year, but only three sectors – telecoms & utilities (+10.6%), media & publishing (+8.4%) and business & industrial (+5.3%) – will exceed their 2019 total.
- Telecoms & utilities: down 2.9% ($2.1bn) to $70.4bn before increasing +10.6% in 2021. Online spend is forecast to grow by 5.6% in 2020 and 11.5% next year. Although all traditional media will see higher investment in 2021, it will remain below 2019.
- Media & publishing: down 4.6% ($3.2bn) to $65.9bn. But advertising spend from media brands will grow 8.4% in 2021 and reach $70bn worldwide for the first time. TV advertising is expected to see the softest decline among traditional media this year (down 10.9% to $16.1bn) but is forecast to fall a further 1.4% next year.
- Business & industrial: down 2.7% ($1.7bn) to $60.8bn, the softest rate of decline among all categories. Growth of 5.3% projected for next year means 2021’s investment will be 2.5% higher than in 2019.
- Retail: down 16.2% ($10.5bn) to $54.3bn, with only an increase of 5.9% projected for 2021. Online ad spend is expected to drop 3.4% in 2020 but to increase by 6.9% next year.
- Automotive: down 21.2% ($11.0bn) to $41.1bn in 2020 but forecast to jump by 14.1% in 2021.
- Travel & tourism: down 33.8% ($8.4bn) to $16.4bn in 2020, but +19.5% next year.
Media and platforms: online video will be fastest growing
- Linear TV: down 16.1% ($29.9bn) to $155.6bn. Despite the US presidential campaign, the US TV market – the world’s largest – still fell by 10% to $54.4bn in 2020. Globally, TV adspend is expected to rise by just 1.1% in 2021, leaving the market 15.2% lower than its pre-COVID total in 2019.
- Out of home: down 27.3% ($11.3bn). OOH is forecast to be the second-fastest growing medium in 2021, with adspend rising by 20.2%, though the $36.3bn total will be 12.7% lower than in 2019.
- Cinema: down by almost a half in 2020, but will lead 2021 growth with a 41.2% rise.
- Linear radio: down 18.4% ($5.9bn). A modest 4.6% increase in 2021 will leave spending 14.7% lower than in 2019.
- Newspapers: down 25.5% ($9.8bn) – this is the worst performance for newspapers in more than 40 years, and the market is expected to be largely flat (-0.4%) in 2021.
- Magazines: down 25.4% ($4bn) and flat in 2021.
- Social media: up 9.3% to $98.3bn and projected to rise 12.2% in 2021, pushing the market to a value of $110.3bn – almost 18.6% of all advertising spend.
- Online video: up 7.9% to $52.7bn in 2020, and expected to be the fastest-growing format in 2021, with spend up by 12.8%.
- Paid search: down 1.9% in 2020 but forecast to grow 7.0% next year – pushing the market to $130.6bn – 22% of all advertising spend.
Geographies: Rebound in UK and Europe
- North America: down 4.3% ($9.9bn) to $221.0bn. The region will see spend rise by 3.8% next year, with the US recouping 89% of 2020 losses.
- Asia-Pacific: down 9.7% ($18.8bn) to $174.4bn, before rising 8.5% in 2021: China +7.7%, Japan +10.2%, Australia +13.2%, India +14.2%.
- Europe: down 14.5% ($21.5bn) to $127.0bn but forecast to grow 10.2% in 2021, recovering 60% of 2020’s losses: UK +14.7%, Germany +9.0%, Spain +12.5%, France +7.1%, Italy +11.3%, Russia +6.8%.
- Latin America: down 32.3% in 2020, led by a sharp 43.2% decline in Brazil (though this is inflated by a sharp devaluation of the Brazilian Real against the US dollar). Spend is expected to be flat in Latin America next year.
- Middle East: down 20.2% ($2.9bn) to $11.3bn in 2020, as oil-rich economies suffer from falling commodity prices. Growth of 7.0% is forecast for next year.
- Africa: down 23.3% to $5.0bn this year, with a slight 2.1% rise expected in 2021 as key markets start to recover from sustained recessions.
WARC Global Advertising Trends: State of The Industry 2020/21
