This year, the global ad market will shrink by nearly seven percent, from $582 billion to $540 billion, according to Magna’s “Life After COVID” forecast. A rebound that is expected in the second half will expand into 2021 when ad spend is predicted to grow by 6.1 percent to $573 billion—still $9 billion less than its pre-COVID level.
Global digital ad sales, including search, video and social banners, will remain stagnant at a one percent increase to $302 billion. Search will see a one percent decline and banner ads an 11 percent decline. Whereas social media and digital ad formats will increase by eight percent.
Linear will fare worse as consumers increasingly shift to digital channels during lockdowns; revenues from global ad sales are expected to drop 16 percent in 2020. Linear television ad revenues will decline 12 percent; print ad sales 32 percent; and out-of-home (OOH) 22 percent.
Magna’s findings show the US market will contract by just four percent, due in part to $5 billion in political ad sales and a three percent growth in digital media offsetting a sharp decline in linear ad sales (a loss of 17 percent).
Also in the US, ad spend on digital formats will stabilize in the summer and recover in the second half, with a two percent increase to $130 billion.
Despite the economic downturn, US ad sales saw a 3.5 percent increase in Q1, fueled by a 19 percent increase in digital video, 17 percent increase in social media and 12 percent increase in search. However, ad sales are expected to see a 17 percent decline in Q2. US ad sales will rebound in 2021 with a four percent gain.
In Q1, the US economy shrank by five percent, and is expected to see a 32 percent decline in Q2 as retail sales, car sales and clothing sales plummeted in April: 16 percent, 50 percent and 90 percent, respectively. Given many parts of the country have reopened, Magna expects ad spend will begin to stabilize in Q3 and recover in Q4.