It will take at least two years for the global ad economy to fully recover from the pandemic as the year’s events will cause it to contract by 10.2 percent, or $63.4 billion, in 2020. Excluding US election campaigning, ad spend worldwide is set to decline by 11 percent to $552.3 billion this year.
That’s according to WARC Data’s “State of the Industry 2020/2021” report, which anticipates this year to be worse than the 2009 recession when ad investment fell by 12.9 percent, or $61.3 billion. Taking into account inflation and exchange rates, real ad market decline this year will be double that of 2009.
In 2021, global ad spend will increase by 6.7 percent, meaning only 59 percent of this year’s losses will be recovered, reports WARC.
Sectors that are hit the hardest include automotive, retail and travel and tourism. A full 17.4 percent of global losses stemmed from the automotive sector, where spend is down 21.2 percent, or $11 billion. Next is retail, with spend down 16.2 percent, or $10.5 billion. Travel and tourism brands cut ad spend by nearly 40 percent.
Next year, automotive will see a 14.1 percent increase, retail will see a 5.9 percent increase and travel and tourism will grow by 19.5 percent.
Marketers expect to invest the most in digital channels next year, with 70 percent of respondents planning to increase spend on online video, 64 percent planning to increase spend on mobile, 59 percent planning to increase spend on online search and 49 percent planning to increase spend on online display.
Traditional channels will continue to wane in 2021 as just 19 percent of marketers intend to up spend on television, 16 percent on radio/audio and 15 percent on out-of-home (OOH). Over half (54 percent) of marketers will decrease spend on print.
Year-over-year, online video is expected to be the fastest-growing format in 2021, with spend expected to rise by 12.8 percent. The second-fastest growing medium will be OOH, with ad spend rising by 20.2 percent. Social media is projected to grow by 12.2 percent in 2021.
Though investment is down for linear television, cinema, linear radio and paid search, next year all formats will see some growth. Newspapers and magazines, however, will remain down or largely flat.
Ad spend is down the least in the US at 4.3 percent, or $9.9 billion, to $221 billion. In 2021, spend there will grow by 3.8 percent, enabling it to recoup 89 percent of this year’s losses.
Though most ad money will be transacted by machines for the first time next year, just 15 percent of marketers name brand safety as one of their top concerns, followed by 10 percent for ad fraud.