Advertising revenues dropped 17 percent year-over-year (YoY) to $46 billion in the second quarter of 2020, according to Magna Global’s latest US advertising forecast.
Linear media took a hit as ad sales plummeted 38 percent in Q2, the result of declines in national and local media formats. National television ad sales saw their worst quarter ever, decreasing by 30 percent as a result of the absence of live sports events. Search declined by three percent, its first decline ever in the second quarter.
On the other hand, digital media in Q2 was flat YoY, reflecting a resilience driven by the surge in digital media consumption during lockdowns. Google posted a 6 percent decline in US ad sales, at $14 billion. Facebook and Amazon both reported growth, the former by 14 percent YoY to $8.3 billion, the latter by 43 percent to $2.5 billion.
In the first half of 2020, ad revenues dipped by 7.2 percent YoY. Linear ad sales saw a 23.1 percent decline while digital ad sales increased by 5.7 percent. National and local television both posted decreases of 19 percent.
Suffering the largest declines in the first half were print and radio, each down 33 percent; out-of-home, down 22 percent; and on-screen movie advertising, down a whopping 63.6 percent.
The latest macroeconomic data shows the US economy will decrease by 5.2 percent in 2020 after falling by 10 percent YoY in Q2. Taking this data into account, Magna has adjusted its full-year growth forecast to show that in 2020, net ad revenues will fall by 4.6 percent to $213 billion, linear ad sales will decline by 16 percent to $81 billion and digital ad revenues will grow by 4.2 percent to $133 billion.
Magna anticipates ad spending will rebound in 2021 by a 4 percent increase due to economic recovery and the Tokyo Olympic Games. Verticals that will increase their linear ad spending in 2021 include entertainment (12 percent), restaurants (8 percent) and technology, personal care and pharmaceuticals (all at 5 percent). For travel marketers, the outlook is less rosy, as Magna expects travel ad spend will decline an additional 15 percent in 2021.