Spend drop ‘not as bad as 2009’

The lat­est pre­dic­tions from Warc say that while 2020 will see a de­cline in ad spend of 8.1 per cent, the last re­ces­sion was worse.

Campaign Middle East - - FRONT PAGE -

The dam­age to global ad­spend in 2020 caused by the coro­n­avirus down­turn will have a less se­vere im­pact than that of the fi­nan­cial cri­sis of 2009, a fore­cast from Warc has found. Warc’s re­port said global ad­spend will fall by 8.1 per cent this year to $563bn, com­pared with the 12.7 per cent con­trac­tion in 2009.

In its re­port, pub­lished at the end of May, the re­search or­gan­i­sa­tion said record-high spend­ing dur­ing this year’s US pres­i­den­tial cam­paigns will stymie the US ad mar­ket de­cline to 3.5 per cent in 2020, while stronger-than-ex­pected first- quar­ter re­sults showed that key me­dia own­ers were in rel­a­tively good health head­ing into the dire sec­ond and third quar­ters.

The UK is sec­ond to France in terms of ad­spend de­clines in ma­jor Euro­pean coun­tries. UK ad­spend is fore­cast to shrink by 16.4 per cent, com­pared with a de­cline of 18.7 per cent in France. Ger­many is ex­pect­ing a 6.1 per cent fall.

Be­fore the global pan­demic took hold and caused economies and so­ci­eties to go into vary­ing de­grees of lock­down, Warc had fore­cast in Fe­bru­ary that global ad­spend would grow by 7.1 per cent this year.

Warc now says tra­di­tional me­dia will fare far worse than on­line, with ad in­vest­ment set to fall by $51.4bn (down 16.3 per cent) this year. De­clines will be recorded across cin­ema (-31.6 per cent), out- ofhome (-21.7 per cent), mag­a­zines (-21.5 per cent), news­pa­pers (-19.5 per cent), ra­dio (-16.2 per cent) and TV (-13.8 per cent).

For on­line ad­ver­tis­ing, growth will slow to just 0.6 per cent in 2020, while so­cial me­dia (9.8 per cent), on­line video (5.0 per cent) and on­line search (0.9 per cent) are ex­pected to record growth but at far lower rates than Warc pre­vi­ously pro­jected. On­line clas­si­fied is set to fall by 10.3 per cent.

Mean­while, in terms of sec­tors, the travel and tourism cat­e­gory is ex­pected to record the steep­est de­cline, with a fore­cast of -31.2 per cent for 2020 rep­re­sent­ing a $7.2bn re­duc­tion in spend com­pared with 2019, to a to­tal of $16.0bn.

Leisure and en­ter­tain­ment (-28.7 per cent to $16.4bn), fi­nan­cial ser­vices (-18.2 per cent to $39.2bn), re­tail (-15.2 per cent to $57.2bn) and au­to­mo­tive (-11.4 per cent to $57.6bn) are all set to wit­ness sharp de­clines this year.


Al­pha­bet: Ad­ver­tis­ing rev­enue across Google Search, YouTube and Google Net­work Mem­bers (third par­ties that host Google ads) is fore­cast to rise by just 1.6 per cent to $137.1bn this year – the com­pany ac­counts for al­most one in four dol­lars (24.4 per cent) spent on ad­ver­tis­ing world­wide.

Facebook: Ad­ver­tis­ers are ex­pected to spend $77.6bn across Facebook, Mes­sen­ger, What­sApp and In­sta­gram this year, a rise of 11.5 per cent from 2019. This marks a down­grade of $5.3bn from the pre­out­break fore­cast and gives Facebook a 13.8 per cent share of global ad­ver­tis­ing in­vest­ment. TRENDS BY ME­DIA AND FOR­MAT

TV: Spend is fore­cast to fall 13.8 per cent to $159.9bn, ac­count­ing for 28.4 per cent of all global spend this year. A third of the global TV to­tal is in the US, where TV spend is set to fall 9.6 per cent ($5.8bn) to $54.7bn, de­spite a boost from pres­i­den­tial cam­paign spend­ing.

Out- of- home: Spend is ex­pected to fall by 21.7 per cent, or $8.7bn, in 2020 com­pared with a pre­vi­ous fore­cast of 5.9 per cent growth.

Cin­ema: Brand in­vest­ment is set to fall by al­most a third (-31.6 per cent) this year, but Warc thinks the sec­tor should re­coup these losses in 2021.

Ra­dio: In­vest­ment is pro­jected to fall by 16.2 per cent – or $5.1bn – this year, com­pared with a pre­out­break fore­cast of 1.8 per cent growth.

News­pa­pers: Spend on print news­pa­pers is fore­cast to fall by $7.6bn, or 19.5 per cent, in 2020, com­pared with a pre- out­break fore­cast of -5.9 per cent.

Mag­a­zines: Ad­ver­tiser spend will fall by more than a fifth (-21.5 per cent), or $3.4bn.

So­cial me­dia: So­cial for­mats com­bined are ex­pected to be the strong­est per­form­ers in 2020, record­ing to­tal growth of 9.8 per cent to $96bn. This does, how­ever, rep­re­sent a down­grade of $6.4bn when com­pared with Warc’s pre-out­break fore­cast.

On­line video: Growth is fore­cast to slow to 5.0 per cent (to $50.3bn) this year, equiv­a­lent to 8.9 per cent of global ad­spend.

Search: Growth will ease to 0.9 per cent in 2020 af­ter a down­grade of $14.1bn from Fe­bru­ary’s fore­cast.


Europe: Euro­pean ad­spend is fore­cast to fall by 12.2 per cent ($18.1bn) to $129.9bn this year, with France lead­ing key mar­ket de­cline at 18.7 per cent (down $3.1bn to $13.4bn). The UK (-16.4 per cent, down $5.1bn to $31.3bn), Ger­many (-6.1 per cent, down $1.5bn to $24.9bn), Spain (-6.0 per cent, down $500m to $6.6bn), Italy (-21.7 per cent, down $2.1bn to $7.6bn) and Rus­sia (-12.3 per cent, down $1.2bn to $8.5bn) will also record sharp falls.

North Amer­ica: This is the re­gion where 39.5 per cent of global ad­spend is trans­acted. Ad in­vest­ment is ex­pected to fall by 3.7 per cent, or $8.5bn, to $222.5bn this year, en­com­pass­ing a 3.5 per cent fall in the US (down $7.7bn to $221.3bn) and a 6.5 per cent dip in Canada (to $11.5bn). This com­pares with pre­out­break fore­casts of 8.8 per cent and 1.9 per cent growth re­spec­tively.

Asia-Pa­cific: Ad­spend is ex­pected to fall 7.7 per cent ($14.4bn) to $173.5bn in 2020, ac­count­ing for 30.8 per cent of the global to­tal. China (-8.6 per cent, down $7.5bn to $80.0bn), Ja­pan (-6.4 per cent, down $2.5bn to $36.2bn) and Aus­tralia (-8.2 per cent, down $1.1bn to $11.9bn) are all set to record de­clines. In­dian growth will ease to 0.7 per cent to $9.4bn in 2020.

Latin Amer­ica: Ad­spend is set to drop 20.7 per cent (by $5.6bn) to $21.4bn this year, led by a sharp de­cline in Brazil (-22.5 per cent, down $3.4bn to $11.5bn), where the Covid-19 out­break has been par­tic­u­larly acute.

Mid­dle East: While not as se­verely im­pacted by coro­n­avirus as other re­gions, ad­spend is still set to fall 15.1 per cent (by $1.8bn) to $10.4bn in 2020, as oil­rich economies suf­fer from fall­ing com­mod­ity prices.

Africa: Spend is ex­pected to de­crease by 19.5 per cent to $5.3bn this year, al­though this could be more se­vere if the out­break wors­ens in the re­gion.

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