UK Adspend To Fall 16.7% In 2020

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The UK advertising industry is preparing for a tough few months, with the latest projections showing a 16.7 per cent downturn in advertising for 2020.

The forecast comes as part of the Advertising Association/WARC Expenditure report.

Prior to 2020 and COVID-19, adspend in the UK industry had enjoyed 10 consecutive years of ad market growth, capped off by a 6.9 per cent YoY increase in 2019.

But even a strong first couple of months will not be enough to save 2020, according to the report, with a revised advertising expenditure forecast of £21.13bn ($40.54bn) meaning a YoY reduction of 16.7 per cent – or £4.23bn ($8.05bn) – from 2019.

“This virus-induced recession is different to previous downturns in that the impact has been both swift and sharp across all media,” said WARC head of data content James McDonald.
“The deterioration of advertising trade, we believe, will be focused primarily in the second and third quarters of this year, though the aftershocks are likely to last into the fourth quarter and early 2021.
“The small and medium sized enterprises for whom digital advertising is a staple are particularly vulnerable during the lockdown period, and their recovery is expected to be protracted thereafter.”
WARC and the Advertising Association have tipped adspend to return to growth in 2021, albeit from a low base in 2020.
Despite the projected downturn, lowered costs and increased media consumption mean there is still amble opportunity for advertisers.
“Media costs have fallen as a direct result of lower demand for inventory and this, paradoxically, comes at a time when consumption and reach has grown markedly across TV, social media and online publications,” McDonald said.
“Research on WARC from multiple sources shows that cutting advertising in a recession directly correlates with a slower recovery, but the practicalities of marketing in the current climate mean sustained investment is simply no longer feasible for a number of large product sectors.”

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