This year will, in some ways, be remembered as more of a mild setback than an industry-changing economic catastrophe for the media business, says GroupM Global VP of Business Intelligence Brian Wieser in GroupM’s Global Media Forecast This Year Next Year.
Despite the grim realities of a global economy that will be the worst since the Great Depression, advertising weathered the storm relatively well and will end up at declining by “only” 5.8 per cent on an underlying basis (excluding-US political advertising).
This is a much better expectation than our June forecast of an 11.9 per cent decline for 2020, but still a sharp fall from 2019’s 8.7 per cent growth rate. Based on the resiliency of digital advertising through the pandemic, we’ve updated our 2021 outlook for the global advertising market from our June forecast of 8.2 per cent to 12.3 per cent growth.
The report noted:
Digital advertising is expected to grow by 8.2 per cent during 2020, excluding US political activity. This follows nearly a decade of double-digit growth, including the last six years, when it was better than 20 per cent globally.
- Digital advertising for pure-play media owners like Amazon, Facebook, Google, etc., should be 61 per cent of advertising in 2021. This share has doubled since 2015 when it was only 30.6 per cent.
- By 2024, we estimate digital advertising will have 66 per cent share globally.
Television advertising will decline by 15.1 per cent excluding US. political advertising, before rebounding to grow 7.8 per cent next year.
- Digital extensions and related media, including advertising associated with traditional media owners’ streaming activities (primarily on connected environments), will grow 7.8 per cent this year and 23.2 per cent next year.
Outdoor advertising is estimated to decline by 31 per cent during 2020, including digital out-of-home media. Next year should see a partial rebound, with 18 per cent growth.
- Beyond 2021, we expect outdoor advertising to grow by low- or mid-single digits and generally lose share of total advertising; however, we do expect larger brands generally to allocate more of their budgets to the medium.
Cinema is newly separated in our global forecast for markets where data could reasonably be estimated. The global sector likely generated less than $3 billion during 2019 and likely fell more than 75 per cent during 2020 given the absence of major studio releases in most markets around the world.
Print advertising, including newspapers and magazines, is expected to decline five per cent for the year, a significant acceleration over the high-single-digit declines of recent years. However, those single-digital declines should resume following an economic recovery.
Audio advertising is likely to decline by 24 per cent during 2020 as advertisers disinvest, in part, because of the medium’s dependence on away-from-home activities, such as driving. Digital extensions, including streaming services from terrestrial stations and their digitally oriented competitors and podcasts, still attract relatively small audiences of a few billion, but help make the broader medium more appealing to marketers.
Mark Lollback (main photo), GroupM Australia CEO said of the report: “Locally we saw the acceleration of trends like eCommerce which has drawn closer ties between marketing activity and purchasing as well as growth in BVOD audiences.
“Despite the challenges, within the disruption of this year there have been many opportunities to connect with consumers in different ways. Understanding the role media channels play overall in delivering objectives and enabling clients to maximise flexibility around consumer consumption trends in the short term, alongside long-term marketing goals are necessary as we move out of 2020.
“We have a sense of optimism going into 2021 and if we continue to lean into technology and the talented specialists in our agencies, and work closely with our media partners, we can continue to deliver outcomes for or clients and help drive the Australian economy forward,” Lollback said.
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