Global advertising spend is set to grow by 4.3 per cent in 2020, as online video and social media continue to be the fastest-growing channels, according to Zenith Media’s latest forecasts.
Between 2019 and 2022, online video and social media will grow by 16.6 per cent and 13.8 per cent a year on average, mainly down to our increasing consumption of both on smartphones. Elsewhere, cinema will have an annual growth of 11.5 per cent, while television records no growth, newspaper shrinks 4.5 per cent, and magazine shrinks 8.1 per cent. Overall advertising expenditure has grown by 5.1 per cent on average since 2010.
However, a 1.6 per cent reduction in traditional mass audiences will cause media prices to increase by 6.1 per cent in 2020. Since 2010, commercial audiences have decreased by 1.3 per cent a year on average, while media inflation has averaged 6.5 per cent a year.
“The days when we could find audiences all in one place are long gone. Now, however, technology empowers us to find them wherever they are, online or offline, and win back value for our clients through efficiency and effectiveness – by ensuring that we target and reach consumers with the right message at the right point in the consumer journey,” said Matt James, global brand president at Zenith.
Typically, 2020 would represent a strong year of growth for advertising, with it being a ‘quadrennial’ year featuring the Summer Olympics, UEFA Euro 2020, and the US Presidential elections. Although, this time around, despite adding $7.5bn to the global ad market, the US-China trade war is expected to counter the ‘quadrennial effect’ and cost the global ad market 1.1 percentage points of growth in 2020 – down from 5.4 per cent to 4.3 per cent.
The US and China will still, however, lead global ad spend growth. Together, they are expected to account for 56 per cent of all growth in ad spend over the next three years, with the US market growing $39.1bn and China by $10.3bn.
India will be the third-biggest contributor to the global ad market, growing $4.3bn between 2019 and 2022. Its growth rate will be 12.4 per cent in 2020, compared to 4.8 per cent for the US and 4.1 per cent for China.
“As geopolitical tensions wipe out most of the expected gains from sport and elections, 2020 will be a disappointing quadrennial year for the ad market,” said Jonathan Barnard, Zenith’s head of forecasting. “If the trade war is settled, we are more confident for 2021, forecasting 4.5 per cent growth in global ad spend despite the absence of the quadrennial events.”
In a separate forecast from GroupM, global advertising spend is expected to grow 3.9 per cent in 2020, amounting to $628bn spent during the year. Of this, the WPP subsidiary expects internet-related advertising to account for $326bn – or 52 per cent – of ad revenue.