This year will, in some ways, be remembered as more of a mild setback than an industry-changing economic catastrophe for the media business, says GroupM Global VP of Business Intelligence Brian Wieser in GroupM’s Global Media Forecast This Year Next Year.
Despite the grim realities of a global economy that will be the worst since the Great Depression, advertising weathered the storm relatively well and will end up declining by “only” 5.8% on an underlying basis (excluding-U.S. political advertising).
This is a much better than predicted by GroupM in its June forecast of an 11.9% decline for 2020, but still a sharp fall from 2019’s 8.7% growth rate.
Digital advertising was resilient through the pandemic and other media have recovered faster than expected, so GroupM has updated its 2021 outlook for the global advertising market from its June forecast of 8.2%, to now predict 12.3% advertising growth next year.
Digital advertising is expected to grow by 8.2% during 2020, excluding U.S. political activity. This follows nearly a decade of double-digit growth, including the last six years, when it was better than 20% globally.
GroupM’s Audio advertising prediction is skewed by an assumption, which may or may not be true in America, that drive time car listening will decline, which has proven not to be true in Australia.
The forecast says the audio advertising sector 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,” says the forecast.
Television advertising will decline by 15.1% excluding U.S. 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), are forecast to 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.
Cinema is newly separated in the study’s 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.
Mark Lollback, GroupM Australia CEO has told radioinfo:
“Locally we saw the acceleration of trends like eCommerce which has drawn closer ties between marketing activity and purchasing as well as growth in BVOD audiences.
“Despite the challenges, within the disruption of this year there have been many opportunities to connect with consumers in different ways. Understanding the role media channels play overall in delivering objectives and enabling clients to maximise flexibility around consumer consumption trends in the short term, alongside long-term marketing goals are necessary as we move out of 2020.
“We have a sense of optimism going into 2021 and if we continue to lean into technology and the talented specialists in our agencies, and work closely with our media partners, we can continue to deliver outcomes for or clients and help drive the Australian economy forward.”
GroupM is part of WPP AUNZ, Australasia’s largest creative tech company. GroupM is responsible for more than $50B in annual media investment through agencies Mindshare, MediaCom, Wavemaker, Essence and m/SIX, as well as the outcomes-driven programmatic audience company, Xaxis and Addressable TV business Finecast.
Download the report here.