The amount of money spent on advertising in 2020 fell US$47 billion from 2019, according to the latest data from Zenith, which expects a recovery to pre COVID levels will take at least another year.
Zenith today released its end of year forecast for global advertising spend, revealing COVID triggered a fall of 7.5 per cent to US$587billion this year. But it wasn’t as bad as was predicted in July when Zenith forecast a 9.1 per cent decline for 2020.
The fall this year was even steeper in Australia – down 12 per cent from 2019 based on today’s forecast – with channels that have been directly impacted by COVID-19, like cinema and out of home, some of the worst hit.
Based on the assumption of a “sustained” global economic recovery as vaccines roll out, Zenith forecasts that global adspend will grow by 5.6 per cent to US$620 billion in 2021, helped by 2020’s lower base and delayed major events like the Summer Olympics and UEFA Euro football tournament.
But 2021 spending will remain below 2019 levels, which won’t be passed until sometime in 2022 at the earliest. Even then the amount will still be around US$70bn lower than it would have been if it had remained on its pre-pandemic track, according to Zenith.
“We’re expecting that the New Year will start showing growth across most media, as the market starts to claw back on this year’s losses,” said Zenith Australia’s National Head of Investment, Elizabeth Baker.
“However, we don’t expect the 2020 drop to be fully mitigated before 2022 at best. Digital investment will lead the growth, with consumption accelerated throughout this pandemic.”
Of note, the total amount spent on digital ads ticked past traditional media in 2020, according to Zenith’s data. The agency predicts the amount spent on digital ads will rise 1.4 per cent in 2020, and increase its share of total adspend to 52 per cent, up from 48 per cent in 2019.
While advertisers likely followed consumers further online this year as COVID-19 lockdowns took effect, the growth is also related to brands’ own digital transformations, according to Zenith. The agency says organisations are increasingly keen to drive consumers to their new ecommerce and digital offerings.
Consumers’ viewing habits also experienced a “step change” in 2020, Zenith says, with increases in on demand video services, including a nine per cent increase in demand for ad-funded video on demand