The global mid-year forecast from media investment company GroupM shows declines in consumer and advertising spend across the board. Covid-19 sharply transformed the global advertising economy from a 6.2 per cent growth rate in 2019 to a decline of 11.9 per cent, excluding the effects of increased US political advertising. This decline returns the industry to slightly higher than 2017 levels in constant currency terms.
2020’s decline can still be considered “modest” given the scale of the impact of the pandemic on global GDP, which will fall much more significantly than it did in the 2009 global financial crisis. In that year, when GDP declined by 1per cent, GroupM estimates that global advertising fell by 11.2 per cent. Including US political advertising, GroupM estimates global advertising will decline by 9.9 per cent in 2020.
GroupM sees positive news on the horizon as it expects global advertising to grow by 8.2 per cent next year (on an ex-US political basis), or by 5.9 per cent including it.
Looking at larger markets, GroupM expects a 0.9 per cent decline in the US, including political advertising, and growth of 9.2 per cent for China next year. Among the top 10 markets, most expect to see double-digit growth including Japan (15 per cent), UK (12.6 per cent), Germany (10.6 per cent), Brazil (15 per cent ) and Australia (25.2 per cent). Meanwhile, Canada and South Korea anticipate low single digit gains while France anticipates high single digit growth during 2021.
On average, during 2020, digital extensions of TV, radio, print and outdoor advertising should equate to $31 billion, or 13 per cent of total advertising activity (up from $22 billion, or 7 per cent, five years ago). Digital extensions are most pronounced in the outdoor sector, where they account for $9 billion this year, or 31 per cent of the total outdoor sector’s activities. Digital extensions of traditional television equate to $12 billion this year, 9 per cent of that medium’s total.
GroupM expects digital extensions to continue taking share of traditional advertising but at a slower pace – equating to 16 per cent of advertising spending on traditional media by 2024.
Television advertising should retain its dominant role for large brands but will nonetheless decline severely this year. Excluding political advertising in the US, GroupM anticipates total television advertising declining by 17.6 per cent in 2020 before rebounding slightly to grow 5.9 per cent next year.
Digital extensions and related media, including advertising associated with traditional media owners’ streaming activities, as well as Hulu, Roku, etc., will fare much better, with growth of +3.7 per cent this year and +11.3 per cent next year. GroupM estimates those digital extensions will amount to around 9 per cent of total TV spending this year. Television’s share of advertising is expected to be 27 per cent during 2020, down from approximately 37 per cent at this point 10 years ago.