Zenith Report: Global Ad Spends To Shrink 9.1% In 2020, Australia To Take 11% Hit

Zenith Report: Global Ad Spends To Shrink 9.1% In 2020, Australia To Take 11% Hit
SHARE
THIS



Global advertising expenditure will shrink 9.1 per cent in 2020, according to Zenith’s Advertising Expenditure Forecasts, published today. To compare, adspend shrank by 9.5 per cent during 2009’s Global Financial Crisis.

Highlights of the report include:

  • Global adspend forecast to drop 9.1 per cent this year
  • Ad market hit hardest Q2; some spend returning, with 5.8 per cent recovery forecast for 2021
  • Trends driving spend: ecommerce, data-driven personalisation, digital acceleration
  • Expected digital advertising increase to 51 per cent of global spend this year & 55 per cent in 2022

Spend beginning to return, with 5.8 per cent recovery forecast for 2021

Advertisers pulled back spending sharply when the scale of the coronavirus crisis became clear. The steepest declines took place between March and May, with timing varying by country. These declines have now started to ease and are expected to gradually moderate over the rest of the year. Zenith forecasts a 5.8 per cent recovery in global adspend in 2021, boosted by the rescheduled Summer Olympics and UEFA Euro 2020 football championship.

The US has been relatively resilient, benefiting from record political spending in the run-up to the Presidential elections in November. US adspend is expected to decline by just seven per cent this year. Asia Pacific is forecast to shrink by eight per cent, thanks to the success of some markets in keeping the virus under control. Advertisers in Western Europe cut spend aggressively in Q2, and adspend is forecast to shrink by 15 per cent here. Zenith forecasts eight per cent decline in Central and Eastern Europe, 13 per cent in Latin America and 20 per cent in MENA in 2020.

In Australia, the estimated decline is 11 per cent in 2020. Neither 2021 nor 2022 will represent a bounce back to pre-COVID levels. By 2022, we still anticipate the overall market being back eight per cent vs. 2019.

Ecommerce and retail change for the long-term

Ecommerce has become a lifeline for consumers, providing the goods they need while unable or unwilling to visit bricks-and-mortar stores. Many consumers have made permanent changes to their shopping habits. According to global research by Criteo, in recent months 34 per cent of consumers have discovered at least one form of online shopping that they plan to continue.

Recent data on Australia – historically a slow adopter of online shopping – demonstrates the trend is picking up pace. The NAB online retail sales index experienced 28 per cent growth in March, 58 per cent growth in April and 50 per cent growth in May.

Retail footfall will be subdued for months, if not years, to come. This has forced brands to accelerate digital transformation efforts and made it critical to have a robust commerce strategy in place, either D2C or through retail partners.

Personalisation at scale, driven by data comes to the forefront

The crisis also raised the value of first-party data for brands. First-party data gives brands powerful insights into their customers’ behaviour and provides a real competitive edge. It will allow brands to navigate changes to consumers’ behaviours and attitudes as the crisis develops, and identify when it’s time to start investing for the upturn.

“Brands need to show consumers that they understand their rapidly evolving needs in this uncertain time,” said Christian Lee, Managing Director, Zenith Worldwide. “So we are helping our clients integrate their data, digital communications and ecommerce approaches, and leverage them more deeply, to deliver personalised experiences throughout the fast-changing customer journey.”

Digital acceleration spurred by social distancing and new behaviours

Consumption of digital media, along with television, spiked in the early weeks of lockdown. Although both are now trending down again, they are not expected to retreat to pre-crisis levels any time soon. Together with the rise of ecommerce and data, this has driven a rapid shift in media budgets from traditional to digital media, accelerating the trend that was already taking place. Zenith now forecasts that digital advertising will account for 51 per cent of global adspend this year, up from the 49.5 per cent it forecast in December.

Digital ad budgets were cut quickly in the crisis’ first phase, given generally easier to cut without penalty. But as time progressed, brands allocated more budget into digital channels to take advantage of their flexibility and ability to optimise performance, particularly important qualities in an uncertain time. Digital adspend is forecast to shrink by just 2% across 2020 as a whole. Zenith does not expect any of this share to return to traditional media as the crisis eases – digital advertising’s market share is forecast to reach 54.6% in 2022.

In Australia, digital adspend is expected to drop 8% in 2020 but will be the quickest medium to recover. By 2022, digital adspend will represent 61% of the total – significantly ahead of the global forecast.

Zenith Sydney’s Head of Investment, Elizabeth Baker said: “By ‘forcing’ adoption of online services, COVID-19 and its associated lockdowns have exposed and normalised digital usage across a range of functions and practices that were not previously widespread, such as working from home. As online media consumption continues to grow and the economy stabilises, we will see digital ad revenue growth accelerate once again, with digital recovering the fastest among all media.”

The recovery of traditional media will be patchy and underpowered
Among traditional media, television and radio suffered the least, expected to end the year only slightly below the market, with 11 per cent and 12 per cent respective declines. The crisis exacerbated the long-term decline of print advertising as newspaper adspend is forecast to shrink by 21 per cent globally this year and magazine adspend drops 20%. Note, newspaper and magazine advertising here includes only the publishers’ advertising revenues from printed publications; their revenues from digital publications are included in digital advertising.

Unsurprisingly, out-of-home and cinema have suffered the most from government restrictions on movement, and consumers’ avoidance of public places. Out-of-home advertising is forecast to shrink by 25 per cent in 2020 and cinema by 51 per cent.

No recovery is forecast for newspapers or magazines, with adspend in both continuing to decrease next year. Recovery for television and radio will be minimal, with two per cent and one per cent growth expected for 2021 respectively. Out-of-home and cinema growth will be stronger as they compensate for much greater declines this year: Zenith forecasts 16 per cent growth for out-of-home and 65 per cent growth for cinema, but neither will return to 2019 peaks by 2022.

“The coronavirus forced brands to embrace digital advertising even faster than expected and made digital transformation of businesses more urgent than ever,” said Jonathan Barnard, Zenith’s Head of Forecasting. “This year will be the first in which digital advertising will attract more than half of total global adspend, a milestone we previously expected in 2021.”

Please login with linkedin to comment

Ad spends Zenith

Latest News

The Australian Publishes List Of 100 Game Changers In The Arts
  • Media

The Australian Publishes List Of 100 Game Changers In The Arts

The Australian, Australia’s leading national news brand, today published its inaugural edition of The List: Arts and Culture as a gloss large format magazine and on theaustralian.com.au. The Arts and Culture List reveals the top 100 identities shaping Australia’s cultural future, from painters to philanthropists, musicians to cultural leaders and dancers to authors. Edited by […]

Blooms The Chemist Comes Up With Creative New Media Portal To Handle Its Physical And Digital Campaigns
  • Campaigns
  • Technology

Blooms The Chemist Comes Up With Creative New Media Portal To Handle Its Physical And Digital Campaigns

Blooms The Chemist is digitising how it manages owned media, rolling out a dedicated supplier media portal capable of managing in-store and online campaigns across its 110+ pharmacies. The Australian pharmacy sector has seen significant growth, accelerated by the COVID-19 response. At the peak of the country’s pandemic, retail pharmacy sales surpassed $800 million, up […]

Passerby Waves Hand Gun At TV Reporter Doing Live Cross On American Gun Violence!
  • Media

Passerby Waves Hand Gun At TV Reporter Doing Live Cross On American Gun Violence!

As the world again reels from the devastating shooting this week in Robb Elementary School in Uvalde in Texas, America’s firearm problems were again on show after a passerby was filmed pointing a pistol at a journalist and her camera crew while doing a live report on, ironically, gun violence. Good Day Chicago journalist Natalie […]

by B&T Magazine

B&T Magazine
McDonald’s New Coffee ‘Australiano’ Gets Roasted For Appropriating Indigenous Ingredients
  • Campaigns

McDonald’s New Coffee ‘Australiano’ Gets Roasted For Appropriating Indigenous Ingredients

A new coffee on McDonalds’ McCafe menu dubbed the “Australiano” – conceived and launched by DDB Sydney – has come under fire for attempting to ‘colonise’ foods that belong to First nations people. The Australiano is produced through a combination of chai, McCafe’s traditional coffee beans and the native Australian wattleseed and will be available […]

Ellen DeGeneres Closes Out Her Show By Revealing She Couldn’t Say The Word Gay
  • Media

Ellen DeGeneres Closes Out Her Show By Revealing She Couldn’t Say The Word Gay

Ellen DeGeneres’s long-running talk show has wrapped and in the final episode, the comedian revealed when the show started she wasn’t allowed to say the word gay on air. DeGeneres revealed that “Twenty-five years ago, they cancelled my sitcom because they didn’t want a lesbian to be in prime time once a week. So I […]

IDC And Data.ai Study Shows Mobile Vs. Console Gamer Gap Is Getting Even Bigger
  • Technology

IDC And Data.ai Study Shows Mobile Vs. Console Gamer Gap Is Getting Even Bigger

data.ai (formerly App Annie), the first unified data ai company, today in partnership with IDC, released the Gaming Spotlight 2022 report. Powered by Game IQ, the report reveals that mobile gaming represents 61 percent of the overall gaming market which is set to hit $222 billion in 2022. The report reveals that mobile gaming is […]

Nielsen Teams Up With TikTok To Unleash Greater Potential On Worldwide Marketing Insights
  • Campaigns
  • Technology

Nielsen Teams Up With TikTok To Unleash Greater Potential On Worldwide Marketing Insights

Nielsen, a global leader in audience measurement, data and analytics, has been selected to participate in TikTok’s Media Mix Modelling Program. TikTok’s program brings together leaders in media mix model marketing measurement to drive reporting consistency and quality for advertisers globally, allowing advertisers to gain more insights into the impact of marketing on the short-form […]

Emplifi First Quarter Report Shows Investments On Ads Are Up But User Engagement Is Flatlining
  • Marketing

Emplifi First Quarter Report Shows Investments On Ads Are Up But User Engagement Is Flatlining

Emplifi, the leading unified customer experience (CX) platform, today revealed the findings of its Q1 2022 analysis of social media spend across thousands of brands worldwide including those in Asia Pacific (APAC). While overall social media ad spend decreased in the first quarter following an impressive holiday showing, it remains significantly higher than a year […]

WPP’s Wavemaker Snares Audible’s $700 Million Media In Global Win
  • Media

WPP’s Wavemaker Snares Audible’s $700 Million Media In Global Win

Audible, a leading creator and provider of premium audio storytelling, today announced that Wavemaker will be its new agency of record  for paid media worldwide, effective May 25th, 2022. Audible reportedly spends about $US500 million annually on advertising and a reported $A50 million here in Australia. Audible, an Amazon company, is headquartered in Newark, New […]

Ogilvy Unveils NSW Government’s Latest COVID PSA “Little Things”
  • Campaigns

Ogilvy Unveils NSW Government’s Latest COVID PSA “Little Things”

Ogilvy’s latest campaign for the NSW Government, “Little Things”, dramatises the idea of the little things that everyone should be doing to make a big difference to COVID safe life this winter. The OLV, social, radio, digital and OOH campaign was brought to life by creating miniature worlds, where COVID safety objects became the hero […]

Reconciliation Australia Launches National Reconciliation Week Campaign Via Carbon Creative
  • Campaigns

Reconciliation Australia Launches National Reconciliation Week Campaign Via Carbon Creative

Reconciliation Australia and Carbon Creative will launch National Reconciliation Week 2022 tomorrow, Friday, 27 May (running through to 3 June) with the theme ‘Be brave. Make change.’ The theme and campaign, developed by social change creative agency Carbon Creative in collaboration with emerging Torres Strait Visual Artist Tori-Jay Mordey, challenges all Australians—individuals, families, communities, organisations, […]

Pearman Media Appoints Tara Lamond As Group Business Director
  • Media

Pearman Media Appoints Tara Lamond As Group Business Director

Pearman Media has announced the appointment of Tara Lamond as group business director. “With experience on both the media and agency sides, including a stint in London, Tara brings a wealth of advertising and media expertise to this role, and we are thrilled to welcome her on board,” said Pearman Media founder and managing director, […]

Beyond the Rainbow: How Brands Can Better Connect with LGBTQIA+ Consumers All Year Round
  • Opinion

Beyond the Rainbow: How Brands Can Better Connect with LGBTQIA+ Consumers All Year Round

In this guest post, Jonathan Munschi (pictured below), head of sales for Twitter Australia, says initiatives such as Mardi Gras and Pride month give brands the ideal platform to connect with the LGBTQIA+, but, Munschi asks, why ignore the rest of the year? It’s time for brands to rethink their approach to LGBTQIA+ inclusive marketing. […]

Opinion

by B&T Magazine

B&T Magazine
Today Is National Sorry Day
  • Media

Today Is National Sorry Day

B&T would like to take time out from the usual programming to acknowledge National Sorry Day today.

‘The Sims 4’ Now Lets You Use Your Own Pronouns For Your Characters
  • Technology

‘The Sims 4’ Now Lets You Use Your Own Pronouns For Your Characters

The latest entry in EA and Maxis’ life simulation series, The Sims 4, has released a new update which allows players to customise their character’s pronouns. This new feature is available only in the English version of the game for the time being, with the developers saying that they will soon release it for other […]

Former Havas Head Of CX Michaela Aguilar Joins Martech Firm Acoustic
  • Technology

Former Havas Head Of CX Michaela Aguilar Joins Martech Firm Acoustic

Acoustic, a marketing cloud, digital experience and lifecycle pricing and promotion technology solution provider, announced today that Michaela Aguilar has joined the team as head of business partnership ecosystem. In her new role, Aguilar will be responsible for business development and expansion, working with partners and the Acoustic team to create new revenue opportunities in […]