Global advertising expenditures will shrink by 9.1 percent in 2020 to $572 billion before climbing 5.8 percent to reach $606 billion in 2021, according to Zenith’s Advertising Expenditure Forecasts. Moreover, advertisers are expected to slash spending by 20 percent across the MENA region.

Advertisers sharply reduced their spending when the scale of the coronavirus crisis became clear. The steepest declines took place between March and May, with timing varying by country. These declines have now started to ease and are expected to gradually moderate over the rest of the year.

The rescheduled Summer Olympics and UEFA Euro 2020 football championship are expected to trigger a 5.8 percent recovery in global ad spend in 2021. Zenith's spending forecast predicts that the ad spend will increase to $636 in 2022.

The US, in fact, is proving to be relatively resilient this year, benefiting from record political spending in the run-up to the political elections in November. US ad spend is expected to decline by just 7 percent this year to $224.5 billion before climbing to $242.8 billion in 2021.

Digital advertising will account for 51 percent of global ad spend this year, an upgrade compared to the 49.5 percent it forecast in December.

Digital ad budgets were cut quickly early in the crisis. But as time progressed, brands allocated more budget into digital channels to take advantage of their flexibility and ability to optimize performance, particularly important qualities in an uncertain time, the report said.

“The coronavirus forced brands to embrace digital advertising even faster than expected and made digital transformation of businesses more urgent than ever,” said Jonathan Barnard, Zenith’s Head of Forecasting. “This year will be the first in which digital advertising will attract more than half of total global ad spend, a milestone we previously expected in 2021.”

(Writing by Seban Scaria; editing by Daniel Luiz)

seban.scaria@refinitiv.com

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