GLOBAL — With COVID-19 wreaking havoc on the global economy, international advertising service WARC has released its latest Global Ad Trends report on “the impact of COVID-19 on ad investment.”

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:

  1. 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.
  2. 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.
  3. 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).
  4. 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.
  5. 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.
  6. 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.

About the Author:

Jason Inocencio was once the Digital Editor of adobo magazine who still loves seeing great campaigns from all over the world. He proudly shows off his love for all kinds of geeky things, whether it be movies, TV shows, comics, sports, or trivia.

Subscribe to access more of adobo Magazine Online

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.