Year 2020 could be regarded as more of a “mild setback than an industry-changing economic catastrophe for the media business”, says GroupM, one of the world’s leading media investment company. Despite the worst ever slump since the Great Depression of 1929, advertising has bravely taken on the storm and is expected to wind up declining by “only” 5.8 percent on an underlying basis (excluding US political advertising). This estimate is a much better projection than GroupM’s June forecast of an 11.9 percent decline for 2020, but still a sharp fall from 2019’s 8.7 percent growth rate.
GroupM says the “nature of the downturn and new consumer behaviours” had compelled businesses to quickly adapt to e-commerce models, benefitting digital advertising significantly. This would be the new baseline from which e-commerce as well as performance-based marketing is expected to now grow. On the whole, however, GroupM has revised their 2021 outlook for the global advertising market from their June forecast of 8.2 percent to 12.3 percent growth.
From the perspective of the eight largest markets — that of the US, China, Japan, UK, Germany, France, South Korea, and Canada — GroupM expect seven of them to see a fall of nearly 2 percent and worse in 2020. The exception is most likely to be China, which is likely to grow at 6.2 percent. However, the good news, says GroupM, is the expectation that all these countries are likely to show growth in 2021: 11.8% in the US, 15.6% in China, 12% in Japan, 12.4% in the UK, 4.6% in Germany, 7.2% in France, 1.6% in South Korea and 15.1% in Canada.
GroupM also presents six key takeaways from ‘This Year, Next Year: Global 2020’ End-of-Year Forecast Report (quoted verbatim):
Digital advertising is expected to grow by 8.2% during 2020, excluding US political activity. This follows nearly a decade of double-digit growth, including the last six years, when it was better than 20% globally. Digital advertising for pure-play media owners like Amazon, Facebook, Google, etc., should be 61% of advertising in 2021. This share has doubled since 2015 when it was only 30.6%. By 2024, we estimate digital advertising will have a 66% share globally.
Television advertising will decline by 15.1%, excluding US political advertising, before rebounding to grow 7.8% next year. Digital extensions and related media, including advertising associated with traditional media owners’ streaming activities (primarily on connected environments), will grow 7.8% this year and 23.2% next year.
Outdoor advertising is estimated to decline by 31% during 2020, including digital out-of-home media. Next year should see a partial rebound, with 18% growth. Beyond 2021, we expect outdoor advertising to grow by low- or mid-single digits and generally lose share of total advertising; however, we do expect larger brands generally to allocate more of their budgets to the medium.
Cinema is newly separated in our global forecast for markets where data could reasonably be estimated. The global sector likely generated less than $3 billion during 2019 and likely fell more than 75% during 2020 given the absence of major studio releases in most markets around the world.
Print advertising, including newspapers and magazines, is expected to decline 5% for the year, a significant acceleration over the high-single-digit declines of recent years. However, those single-digital declines should resume following an economic recovery.
Audio advertising is likely to decline by 24% during 2020 as advertisers disinvest, in part, because of the medium’s dependence on away-from-home activities, such as driving. Digital extensions, including streaming services from terrestrial stations and their digitally-oriented competitors and podcasts, still attract relatively small audiences of a few billion, but help make the broader medium more appealing to marketers.