Global ad market decline in 2020 is double that of the Great Recession
The coronavirus pandemic has wiped $63bn (£47bn) of revenue from the global advertising market this year, a decline that is double the rate of the Great Recession after accounting for inflation.
According to the latest report from the World Advertising Research Centre (WARC), traditional media suffered its worst year on record, led by sharp cuts in automotive, retail, and travel and transport ad budgets.
The traditional media slump accounted for the near-entirety of the advertising market decline in 2020.
Cinema fell 46.5% (down $1.5bn), out of home ads dipped 27.3% (down $11.3bn), newspapers declined 25.5% (a $9.8bn fall), magazines saw a 25.4% slump (down $4bn) and radio was 18.4% lower (a $5.9bn drop). Along with TV, they all recorded their worst performance in WARC's 40-year history of market monitoring.
Global spend is on course to fall by 10.2% to a total $557.3bn this year, figures showed, with recovery estimated to take at least two years.
The study also revealed that ad investment is forecast to rise by 6.7% next year, meaning only 59% of this year’s losses will be recouped. All product categories (telecoms and utilities, media and publishing, business and industrial, retail, and automotive) are set to increase spend next year, although only three will top their 2019 total.
Online video is the only format to have its 2020 growth estimate upgraded, and is expected to lead growth in 2021. It came as online video viewing leapt this year as people were forced to stay at home orders to curb the spread of the virus.
Online video ad spend is on course to rise by 7.9% to $52.7bn this year and a further 12.8% in 2021.
The global marketing intelligence service found that these new projections represent a downgrade of 2.1 percentage points compared to its previous global forecast of a 8.1% decline made in May.
The advertising market would need to grow by 4.4% in 2022 to match 2019's peak of $620.6bn, it said.
James McDonald, head of data content at WARC and author of the research, said: “Some platforms - such as e-commerce and social properties - have emerged from this year 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; while growth is expected in most corners of the industry next year, this will be more reflective of a tumultuous 2020 than a sterling 2021.
“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 two years.”
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In terms of regional ad spend, North America, where 39.6% of global ad spend is transacted, investment is down by 4.3%, or $9.9bn, this year. The region will see spend rise by 3.8% next year, with the US recouping 89% of 2020's losses, the report said.
Advertising spend is expected to fall 9.7% ($18.8bn) to $174.4bn in 2020 in Asia-Pacific, before rising by 8.5% in 2021.
China, Japan, Australia and India are all set to record growth in 2021 following declines in ad trade this year.
Meanwhile European ad spend is down 14.5%, or $21.5bn, to $127bn this year, with France leading key market decline with a 16.7% fall to $13.4bn. The region is forecast to grow by 10.2% next year, recovering 60% of 2020's losses.
The UK, Germany, Spain, France, Italy and Russia are all set to see ad market growth next year.
The WARC report reviewed global advertising investment, media consumption and CPM inflation, conducting research from 100 markets worldwide.
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