There’s no easy way to talk about the COVID-19-related ad market destruction. According the WARC’s most recent Global Advertising Trends report, analysts expect ad spending to fall by 8.1% this year when compared to 2019 levels. The big cuts by marketers will trim nearly $50 billion from anticipated ad spending and result in a total of $563 billion.
The categories that will be most significantly impacted include:
- Transportation and tourism (-31.2%)
- Leisure and entertainment (-28.7%)
- Retail (-18.2%)
These declines are particularly painful in sectors which had been expected to increase ad spending. For example, instead of spending 11.8% on marketing this year, financial services companies will cut budgets by 18.2%. In the household and domestic products category, the hoped-for 10.5% boost in spending will transform into a 6% cut. Automotive marketers will pull back messaging by 11.4% instead of spending 6.8% more.
With up to 25% of the U.S. workforce now on furlough, leave or unemployed, spending on non-essential items may be somewhat muted. But 75% of workers still have jobs and they’ll be buying both essential and non-essential items. In addition, the health care and pharmaceutical sectors will be among the least impacted in terms of consumer spending and ad budgets.
Here’s where WARC analysts see the global ad market by the end of the year. The pre-outbreak numbers are listed first, and the post-outbreak numbers are in parentheses.
- TV +2.5% (-13.1%)
- Radio +1.8% (-16.2%)
- Newspapers ‑5.8% (-19.5%)
- Magazine ‑5.6% (-21.5%)
- OOH +5.9% (-21.7%)
- Cinema +5.0% (-31.6%)
For digital media, which is likely to eke out only a 0.6% increase this year, versus the 13.2% jump projected in February, the details are:
- Social media +20% (+9.8%)
- Online video +20.2% (+5.0%)
- Online display +14.3% (+2.1%)
- Search +12.4% (+0.9%)
Ad Spending to Fall, But Opportunities Exist
While all of these numbers likely leave media sellers and properties feeling concerned for the rest of the year, WARC analysts point out that the recession of 2009 hit the ad market much harder. That blow amounted to a 12.7% contraction. Despite the near certainty for ad spending to fall, media sellers can focus on bright spots like the political and health care categories this year. According to our State of Media Sales survey, sellers expect to find growth in these verticals. In addition, local entertainment-related businesses like amusement parks will re-open in a limited capacity, and they’ll want to target local staycationers. To learn more about that audience, check out the AudienceSCAN profile on AdMall by SalesFuel.