Research by advertising research firm WARC that covered 100 markets worldwide showed that 2020 was the worst year on record for traditional advertising media, while the online market failed to record growth for the first time since the Dotcom crash.
Ad spend excluding political campaigning was down by 11 per cent to $US552 billion this year with the rate of decline double that of the last recession in real terms. The automotive, retail, and travel and tourism sectors all cut ad budgets sharply this year, WARC has revealed.
Other key findings included:
- Media owners saw revenues fall by a combined $US63 billion in 2020.
- Ad market decline this year is double that of the Great Recession after accounting for inflation.
- Ad investment is forecast to rise by 6.7 per cent next year, meaning only 59 per cent of this year’s losses will be recouped.
- The majority of ad money will be transacted by machines for the first time in 2021.
- Online video is the only format to have its 2020 growth estimate upgraded, and it will lead growth in 2021.
- All product categories are set to increase spend next year, though only three will top their 2019 total.
The latest WARC data appears a little more dramatic than similar research released by GroupM yesterday that found global ad spends had fallen by 5.8 per cent on an underlying basis (excluding-US political advertising).
However it was a much better expectation than GroupM’s 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, GroupM has updated its 2021 outlook for the global advertising market from its June forecast of 8.2 per cent to 12.3 per cent growth.
Also arriving yesterday was the latest data from IPG’s media research and intelligence division Magna that found Australia’s advertising market had declined by -6.2 per cent in 2020 to $15.7 billion dollars as GDP shrinks by -4.5 per cent due to the COVID-triggered recession. Read the full report here.
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