Media owners worldwide experienced “the worst year on record for traditional advertising media” in 2020, with the online ad market failing to chart growth for the first time since the Dotcom crash twenty years ago, according to a recent report released by marketing research firm WARC.
WARC’s latest “Global Ad Trends” report, which focused on the COVID-19 pandemic’s impact on the global ad market, found that media owners saw revenues in traditional advertising media—excluding political campaign spending—down by 11 percent worldwide in 2020, effectively slashing $63 billion from the global advertising economy, which currently stands at a combined total of about $552 billion.
In the United States, which remains the top ad market in the world and comprises more than 26 percent of total global ad spending, ad investment dipped more than four percent in 2020. Comparatively, the U.S. fared better than many other key markets, particularly in Europe (UK, Germany, France and Italy), Latin America (Brazil) and Asia (Japan and India), where ad spending was down by double digits.
The report called the 2020 ad recession “worse than the last in absolute terms” and said that, after accounting for inflation and exchange rates, stands at “double that of 2009,” making this year the worst on record for traditional media spending, with an online ad market that “failed to grow for the first time since the Dotcom crash.”
|Global advertising investment forecast (2020 vs. 2021)|
Social media and online video were the only two advertising formats to chart growth in 2020, up 9.3 percent and 7.9 percent, respectively. The WARC report anticipates both of those formats to continue to lead growth in 2021.
Among the advertising categories hardest hit hardest in 2020, the automotive industry fared worst, which accounted for 17.4 percent of all global ad losses. That sector saw ad spends plummet by 21 percent (or about 11 billion) this year. The retail sector similarly lost 10.5 billion in ad revenues in 2020, followed by the travel and tourism industry. Ad spending in the government and non-profit sectors remained unscathed.
According to the report, global ad spending is forecast to rise 6.7 percent next year, and this rebound is expected to recoup an estimated 59 percent of 2020’s losses.
WARC’s report “Global Ad Trends: The State of the Industry 2020/21” drew on data aggregated from 100 markets worldwide and collaborated with Nielsen to measure net advertising investment data across 19 product categories.