To help companies plan for 2020/2021, this new report summarizes the latest adspend projections by market, media, and product vertical from WARC Data, alongside commentary from industry experts.
Findings in this report include:
- An economic recession is highly probable, likely to lead to an advertising recession.
- Major FMCG advertisers lowered advertising and marketing investment in the 2008-09 recession but it held as a share of sales revenue.
- FMCG advertising money is moving online but brand building is still important while selling via third-party retailers and not directly to customers.
- Consumers are adjusting to “living a new normal” and new buying habits may prompt permanent shifts in behavior.
Among the key takeaways are:
- Advertising investment is set to fall by 8.1 percent to $49.6 billion worldwide this year. This compares to a pre-outbreak forecast of 7.1 growth, equating to an absolute downgrade of $96.4 billion.
- This year’s downturn will be softer than in 2009, when the ad market fell by 12.7 percent ($60.5 billion). Among the reasons for this are the US presidential elections this year, stronger-than-expected first-quarter results, and a more established online sector – particularly within e-commerce.
- Almost all product sectors will record a decline in ad investment this year. The most severe falls will be recorded among travel & tourism (by 31.2 percent), leisure & entertainment (by 28.7 percent), financial services (18.2 percent), retail (15.2 percent), and automotive (by 11.4 percent).
- Traditional media will fare far worse than online. Investment is set to fall by 16.3 percent ($51.4 billion) this year, with the biggest decline to happen for cinema, by 31.6 percent.
- Internet advertising is set to record mild growth this year of 0.6 percent at a global level, though several key markets will witness a fall. Social media is expected to grow 9.8 percent, although online classified — particularly recruitment — is set to fall by 10.3 percent.
- A recovery is forecasted for 2021 by 4.9 percent. This will still leave the value of global ad trade $21.9 billion lower than its 2019 peak. Ad investment would need to rise by 3.7 percent in 2022 to complete the recovery fully.