U.S. Ad Market to Grow 4% in 2020

BY Kathy Crosett
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Brian Wieser, Global President, Business Intelligence at GroupM, has published a new report on advertising market predictions for next year. This year, the U.S. will likely end up with a 6.4% growth rate over 2018. That figure means marketers will have spent about $244 billion on advertising. Here are the details for 2020.

Top-​Level Analysis

Wieser’s projections are always interesting because he gives us insight into his model. He takes both personal consumption expenditures and industrial production into account. These factors influence what businesses will spend on advertising. But these aren’t the only factors that cause businesses to spend more on branding and promotions. Your clients, for example, might spend more when a new competitor enters the market. New technology, which leads to new product development, can also boost spending. However, since personal consumption seems to be slowing, Wieser believes ad spending growth will be about 4% next year and 3% in 2021.

Projected Digital Spending

Nearly 50% of the huge U.S. ad market will go to online operators. Next year, businesses will allocate $127 billion to this sector. Interestingly, the digital growth rate will slow from this year’s 20% increase to about 13% in 2020. One big reason for the change may be the shift away from cookie-​based targeting. Advertisers and tech companies will be looking for solutions that allow for targeting while also protecting consumer information.

Traditional Media Outlook

The out-​of-​home ad market will continue to shine in 2020, with an anticipated growth rate of 8%. Total spending on billboards, transit walls, and street furniture will amount of $8.3 billion. The strength of OOH over the past few years means the format now accounts for 3.4% of all advertising.

Radio advertising will likely maintain its current level of ad spending, while media businesses engaged in selling print advertising face another year of declines. Directories will face a drop of at least 20% and direct mail will also shrink in 2020. The one bright spot in print will be niche markets.

TV media sellers also face challenges. This year, excluding political ad spending, will bring about a 2% decline for the format. The local TV market will bear the burden of this drop as traditional advertisers move away from the format. However, local TV sellers may be able to pitch their markets and audiences to new DTC brands who want to expand. While these companies may be digital-​only vendors, they may find that online advertising isn’t enough to get them to their revenue targets.

Targeting the right audience with the right media format will be more important than ever in 2020. You can give your clients an edge by showing the data from AudienceSCAN profiles and helping them plan new campaigns. The profiles are available at AdMall from SalesFuel.


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