Covid erased $63bn in global adspend, and 2021 will only give back 59% of that

The latest forecast from WARC calls for a 10.2% drop in global ad spend in 2020, and the organization says it will take until 2022 to recover to 2019's level of spend.

These Warc heatmaps show forecasted adspend declines in 2020 (top) and increases in 2021 (bottom), with darker colors indicating greater change.
These Warc heatmaps show forecasted adspend declines in 2020 (top) and increases in 2021 (bottom), with darker colors indicating greater change.

COVID-19 made $63 billion (£47 billion) in spending disappear from the global advertising market in 2020, and a 6.7% forecasted improvement in 2021 will only recoup 59% 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% ($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% drop, made in May.

With the 6.7% growth forecast in 2021, the industry would need to grow another 4.4% 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 U.S. elections were removed, the global ad market would record an 11% 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%).

Forecast by region
Region20202021
Africa-23.3% to $5bn2.1%
Asia-Pacific-9.7% to $174.4bn8.5%
Europe-14.5% to $127bn10.2%
Latin America-32.3% to $18.6bnFlat
Middle East-20.2% to $11.3bn7.0%
North America-4.3% to $221bn3.5%

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%, $62.4 billion) to a total of $253.9 billion. Linear TV spending fell 16.1% ($29.9 billion). 

The online advertising market—54.4% of the year's total—is flat (-0.3%) at $303.3 billion. This was the first non-growth year since the dot-com crash in 2000. 

Cinema and out-of-home, two hard-hit forms of media in 2020, will be the fastest-growing formats in 2021, with cinema rising 41.2% and OOH 20.2%, Warc said.

Social media formats were the strongest performers in 2020, recording total growth of 9.3% to $98.3 billion. The category will rise another 12.2% in 2021 to reach $110.3 billion, equal to almost a fifth (18.6%) of all advertising spend.

Online video is on course to rise 7.9% to $52.7 billion in 2020 and will grow by 12.8% in 2021. Paid search, which will decline slightly this year, will rebound with growth of 7.0% in 2021 to reach $130.6 billion—just over a fifth (22.0%) of all adspend.

Travel and automotive lead sector losses

Adspend within the automotive sector is down by a fifth (21.2%), or $11 billion, to $41 billion this year, meaning the sector is responsible for almost one in five (17.4%) lost dollars. Spending in retail fell 16.2% to $54.3 billion. The travel and tourism sector saw adspend drop 33.8% ($8.4 billion) to $16.4 billion).

A version of this story was first published by Campaign Asia-Pacific

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