Now that we are almost halfway through 2019, ad industry experts are fine-tuning their projections for 2020. Brian Wieser, global president of Business Intelligence for GroupM, has long kept an eye on the advertising market. Wieser has just released his latest figures and they’re worth checking out, especially in the context of political ad spending.
In 2020, we can expect the general ad market to grow about 4.0%. That number doesn’t tell the whole story. Every other year, ad spending fluctuates because of politics. Regardless of where you stand on the political spectrum, there’s money to be made in selling advertising. For now, Wieser is expecting political ad spending to drive a $10 billion bump in the ad market next year, which would result in an 8.2% growth rate over this year’s spending.
Beyond the political arena, the economy and the ad markets are changing. As tech companies continue to score significant revenue gains, they are also boosting ad spending, mostly in digital formats. Wieser points out that the likes of Expedia, Uber, Facebook and Amazon account for nearly $30 billion in ad spending. All digital ad spending will likely grow by 17% this year and 15% next year, excluding the political category.
At the same time, traditional businesses in categories like consumer packaged goods, generally experience revenue gains that match the economic growth. These businesses are at the end of their rapid growth cycles and consequently are not spending heavily on advertising in order to gain market share. This fact, along with “the shift from the economy’s local orientation toward its national one,” says Wieser, has implications for local media companies.
Local Media Outlook
While ad spending in the local TV market rose in 2018, Wieser predicts a decline in 2019. The better news is that political ad spending will boost the bottom line for many organizations in 2020. The number of highly polarized contests and voter initiatives will drive candidates and PACs to spend 3.6% more on local TV advertising than what advertisers will spend this year.
We can expect further erosion in the print media markets this year and next, but Wieser is slightly more optimistic about radio and out-of-home advertising. “Both outdoor and radio retain unique characteristics for reaching audiences and don’t face direct alternatives in the ways that TV and print do.” Counting political advertising, radio will likely fall ‑4.8% in 2019, when compared to 2018, and only ‑0.1% next year. Similarly, out-of-home will experience a ‑3.2% drop from last year, but an 8.1% gain in 2020 when the political ad money begins to roll in.
In many markets, the political ad spending has already started. Be ready to talk about which types of voters pay attention to specific media formats when your clients ask. Check out the AudienceSCAN profiles available at AdMall from SalesFuel.