Covid-19 wipes $63bn off global advertising market

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The Covid-19 pandemic has wiped more than $63bn from the global advertising market, and recovery will take at least two years, according to Warc’s Global advertising trends report.

According to the report, Adspend is set to decline by 10.2% worldwide this year, a 2.1pp downgrade from Warc’s May forecast. Excluding US election campaigning, ad spend is set to fall by 11.0% – $68.3bn – to $552.3bn this year.

Covid-19 wipes $63bn off global advertising market

The findings are based on data from questionnaires sent to media owners, industry bodies and monitoring organisations in 100 markets worldwide, and is a projection based on those responses.

This year’s ad recession is worse than the last in absolute terms. Further, after accounting for inflation and exchange rates, real ad market decline is double that of 2009. Traditional media had their worst year on record, and online failed to grow for the first time since the Dotcom crash.

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Ad investment is forecast to rise by 6.7% next year, meaning only 59% of this year’s losses will be recouped. A doubling in unemployment is set to limit consumer spending across major economies, while global trade will remain depressed. Advertising investment would need to grow by 4.4% in 2022 to top the peak recorded in 2019.

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The report says that online video is the only format to have its prospects upgraded. Consumption leapt this year as nations imposed stay-at-home orders to quell the virus, and this lifted CPMs in step. Online video will lead growth in 2021 (+12.8%), following a 7.9% rise this year.

Covid-19 wipes $63bn off global Ad market Brandspurng
Note: Data are net of discounts, include agency commission and exclude production costs. Online display includes social media and online video.
SOURCE: WARC Data, Global Ad Trends: State of the Industry 2020/21

The majority of ad money will be transacted by machines for the first time next year, yet only 15% of marketers list brand safety as one of their biggest concerns, falling to 10% for ad fraud.

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In a sign of the times, only the government & non-profit sector increased ad spend in 2020. A full 17.4% of global losses were within the automotive sector, where spend is down by a fifth, or $11.0bn. The retail sector follows (-$10.5bn), with travel & tourism brands cutting ad spend by a third (33.8%). All categories bar government & non-profit are set to increase spending next year, though only three will top their 2019 total.

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Covid-19 wipes $63bn off global advertising market - Brand SpurCovid-19 wipes $63bn off global advertising market - Brand Spur

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Covid-19 wipes $63bn off global advertising market - Brand SpurCovid-19 wipes $63bn off global advertising market - Brand Spur

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