Covid-19 made $63 billion in spending disappear from the global advertising market in 2020, and a 6.7 percent forecasted improvement in 2021 will only recoup 59 percent of those losses, according to a new report from Warc.
Warc's Global Advertising Trends: State of The Industry 2020/21 report said that global spend will fall by 10.2 percent ($63.4 billion) to total $557.3 billion in 2020. This is a downgrade of 2.1 percentage points from Warc's previous global forecast of an 8.1 percent drop, made in May.
With the 6.7 percent growth forecast in 2021, the industry would need to grow another 4.4 percent in 2022 to get back to 2019's peak of $620.6 billion in spend, Warc reported.
If the $4.9 billion of advertising spend on the US elections were removed, the global ad market would record an 11.0 percent decline ($68 billion) this year. Warc also pointed out that in absolute terms, this year's decline is worse than the last recession in 2009, when the ad market contracted by $61.3 billion (12.9 percent).
|Forecast by region|
|Asia-Pacific||-9.7% to $174.4 billion||8.5%|
|Europe||-14.5% to $127 billion||10.2%|
|Middle East||-20.2% to $11.3 billion||7.0%|
|North America||-4.3% to $221.0 billion||3.5%|
Worst year ever for traditional media
Traditional media accounts for nearly all of the decline in 2020, with global spend down by a fifth (-19.7 percent, $62.4 billion) to a total of $253.9 billion. Linear TV spending fell 16.1 percent ($29.9 billion).
The online advertising market—54.4 percent of the year's total—is flat (-0.3 percent) at $303.3 billion. This was the first non-growth year since the dot-com crash in 2000.
Cinema and OOH, two hard-hit forms of media in 2020, will be the fastest-growing formats in 2021, with cinema rising 41.2 percent and OOH 20.2 percent, Warc said.
Social-media formats were the strongest performers in 2020, recording total growth of 9.3 percent to $98.3 billion. The category will rise another 12.2 percent in 2021 to reach $110.3 billion, equal to almost a fifth (18.6 percent) of all advertising spend.
Online video is on course to rise 7.9 percent to $52.7 billion in 2020 and will grow by 12.8 percent in 2021. Paid search, which will decline slightly this year, will rebound with growth of 7.0 percent in 2021 to reach $130.6 billion—just over a fifth (22.0 percent) of all adspend.
Travel and automotive lead sector losses
Adspend within the automotive sector is down by a fifth (21.2 percent), or $11.0 billion, to $41 billion this year, meaning the sector is responsible for almost one in five (17.4 percent) lost dollars. Spending in retail fell 16.2 percent to $54.3 billion. The travel and tourism sector saw adspend drop 33.8 percent ($8.4 billion) to $16.4 billion).
A version of this story first appeared on Campaign Asia-Pacific.
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