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Global advertising to decline by 11.9% in 2020: Report

  • In its global mid-year media forecast, GroupM details the way covid-19 has sharply transformed the global advertising economy, from a 6.2% growth in 2019 to a double-digit fall this year

NEW DELHI: Global advertising is expected to fall by 11.9% in 2020, excluding the effects of increased political ads in the US ahead of the presidential elections, said a report by media agency, GroupM. However, global ads will register a growth of 8.2% next year.

In its global mid-year media forecast, the agency details the way covid-19 has sharply transformed the global advertising economy, from a 6.2% growth in 2019 to a double-digit decline this year.

The agency emphasised that this decline can still be considered 'modest' given the scale of the impact of the pandemic on global GDP, which is likely to fall significantly, compared to that in the 2008 global financial crisis.

Global advertising is expected to grow by double digits for half of the top 10 markets and by single digit for the rest in 2021.

The report also said with a 3.7% contraction in GDP growth this year, India is expected to witness a more than 20% decline in its overall advertising spends, which were forecast to touch over 91,641 crore this year.

In addition to India, Brazil, the Middle East and North Africa (MENA) and Spain will also witness over 20% decline in ad spends.

Television ads should retain their dominant role for large brands but will nonetheless tumble severely this year. Excluding political advertising in the US, total television advertising is likely to fall by 17.6% in 2020, before rebounding slightly to grow 5.9% next year.

GroupM said, in 2020, digital extensions of TV, radio, print and outdoor advertising should equate to $31 billion, or 13%, of total advertising activity (up from $22 billion, or 7%, five years ago). Digital advertising is expected to decline by 2.3% during 2020. This follows nearly a decade of double-digit growth, with many years exceeding 20% at the global level. Outdoor advertising is expected to decline by 25%, including digital out-of-home media but, next year, we should see a partial rebound with 14.9% growth.

There was rapid growth in TV consumption during the initial days of the coronavirus pandemic and related curbs and on-demand streaming consumption rose substantially.

E-commerce accelerated rapidly as retailers saw massive gains in their sales despite significant declines in broader measures of retail activity.

While these trends are unlikely to continue at such extremes through the remainder of the year (or the pandemic), they illustrate changes that have occurred and, in case of digital activity, accelerated growth that will bring the economy’s digital transition forward. Hybrid business models featuring purchases online with in-store or pickups will become more common

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