"It could be worse" is slim comfort when you're talking about the seemingly endless trash fire that is 2020, but when it comes to the fate of advertising this year, that appears to be the sentiment.
In a report released today, GroupM projects that global ad spending will drop 9.9% this year, meaning the Covid-19 pandemic will somewhat literally decimate the ad industry.
10% sounds like a pretty steep plummet, and that's because it is. But GroupM also finds reasons for optimism, as you'll see in today's Adweek coverage by my colleagues Minda Smiley and Doug Zanger.
A few highlights:
• What’s keeping the drop from being worse? The U.S. presidential election, which will inject enough money into advertising to lift what would otherwise be a projected 11.8% decrease.
• But GroupM also says that, considering the pandemic’s scope, the impact is surprising. “While severe to be sure, 2020’s decline can still be considered ‘modest’ given the scale of the impact of the pandemic on global GDP, which will fall by much more than it did in the 2009 global financial crisis,” the report stated. “During that year, when GDP declined by 1%, we estimate that global advertising fell by 11.2% in nominal terms.”
• During 2020, GroupM said digital extensions of TV, radio, print and outdoor advertising should equate to $31 billion, or 13%, of advertising activity, up from $22 billion five years ago.
• The media agency expects digital advertising, “narrowly defined to exclude traditional media extensions,” to drop 2.4% this year following nearly a decade of double-digital growth.
• Excluding political advertising in the U.S., GroupM anticipates total television advertising to decline by 17.6% in 2020 before rebounding slightly next year.
• GroupM expects out-of-home media, including digital, to decline 25% this year. The agency said this medium has been “disproportionately” impacted by the crisis.
Be sure to check out our coverage for much more, including the agency's prediction for how "pent-up demand" might help the industry rebound quickly in the year ahead.
David Griner
Creative and Innovation Editor, Adweek
David.Griner@Adweek.com
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