Economic slowdown will decelerate global advertising growth in 2020 & 2021: GroupM report
Digital will account for 52% of total global ad tally in 2020, as per Worldwide Media Forecasts for 2020 by GroupM. The growth rate of global TV advertising will decline to 3.6% in 2019
Despite solid growth from the U.S and the UK markets, the weakening global economy will lead to deceleration in global advertising growth. According to the Worldwide Media Forecasts for 2020 by GroupM, compiled by Brian Wieser, global president of business intelligence at the WPP company, the report estimates that global advertising will grow at 3.9% and 3.1% in 2020 and 2021 respectively.
The global advertising growth is expected to range between 3 to 4 per cent through 2024. The report estimates that, “The total global advertising market during 2020 will amount to $628 billion. However, it would likely approach $700 billion on a broader definition that includes spending on direct mail and directories around the world.”
A news report highlighted the findings to state, “Although much worse than in recent years, we note that this would amount to a similar pace of growth to what was observed during 2012-2014.”
The report forecasts $326 billion in digital ad revenue during 2020, up from $294 billion in 2019. Digital will account for 52 per cent of total global ad tally in 2020. However, the growth rate of global TV advertising will decline to 3.6 per cent in 2019 excluding U.S. political advertising, the report states.
The GroupM report predicts just below $170 billion in global TV ad revenue through 2024. While its median growth rate was just 0.1 percent in 2019, the report predicts TV outlays to increase to 1.8 per cent in 2020, thus indicating that there are many countries where TV advertising is still growing.
According to the report, streaming services will continue to gain steam. As per the news report, Netflix has a 5 per cent share of viewing based off the Nielsen data. It is expected Netflix to spend $3.5 billion this year on content production and $5 billion by 2024. Disney is also anticipated to spend $5 billion annually on content for Disney Plus by 2024.
Highlighting report findings a news report stated, “For advertisers, some elements of television will worsen because ad inventory is likely scarcer, and reach is likely harder to come by. On the other hand, where advertising does exist in this new world—and many streaming services will embrace advertising as an element of their financial models—it will likely reach more engaged consumers, in potentially more valuable environments.”
According to the report, “Outdoor advertising, a sector with $39 billion in global ad revenue during 2019 will indicate growth slowing from 5.3% in 2018 to 1.8% in 2019, with growth by 2.5% in 2020, and 3–4% growth rates in most subsequent periods. Outdoor advertising is growing faster than the rest of the industry, aside from pure-play digital media.”
Combined, TV and digital make up 80 per cent of all advertising, the report says, leaving out-of-home, print and radio. The report states, print “still struggles” with newspapers estimated to account for $39 billion in ad revenue in 2019, down 11 per cent from 2018. Newspapers are estimated to decline by 10 per cent every year going forward. Magazines face a similar threat, with the report estimating a decline of 10 per cent in 2019. Going forward, successful “print” businesses will generally depend upon subscription fees and a broad geographic focus.
Global radio advertising growth will remain modest, the report predicts “Growth by 1.8% in 2020. Excluding the impact of political advertising in the U.S., the radio industry is essentially stable and should grow by 0–1% each year into the future.”
Key takeaway from the report states, “Despite these generally unfavourable growth trends, all marketers should regularly assess opportunities to use media beyond television and pure-play digital in their campaigns. Just because a medium is growing slowly or declining does not mean it cannot be impactful for a marketer now or in the future.”
Read more news about (internet advertising India, internet advertising, advertising India, digital advertising India, media advertising India)For more updates, be socially connected with us on
Instagram, LinkedIn, Twitter, Facebook & Youtube