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The impact of Covid-19 on ad investment: “We’ll feel this for a generation”
June 3, 2020 | By Michelle Manafy, Editorial Director – DCN@michellemanafy![](https://digitalcontentnext.org/wp-content/uploads/2020/06/closedforbiz.png)
A new report from WARC predicts that the value of global advertising trade will decline by 8.1% – or $49.6bn – this year, to a total of $562.9bn. This comes only months after a pre-outbreak forecast of 7.1% growth, which it made in late January. As such, the absolute downgrade equates to $96.4bn. WARC’s latest Global Ad Trends report focuses on the impact of COVID-19 on global ad investment. It summarizes the latest ad spend projections by market, media and product vertical from WARC Data, and provides insights and commentary from industry experts.
![](https://digitalcontentnext.org/wp-content/uploads/2020/06/WARCMarketBudgetIndex-1-1024x354.png)
Key findings
Key findings from the report, Global Ad Trends —Adspend 2020/21 — COVID-19 and ad investment:
1. This year’s downturn will be softer than in 2009, when the ad market fell by 12.7% ($60.5bn). This is for a number of reasons, including the U.S. presidential elections, stronger-than expected first quarter results, and a more established online sector – particularly within e-commerce.
2. Almost all product sectors will record a decline in ad investment this year. The most severe falls will be recorded among travel & tourism (-31.2%), leisure & entertainment (-28.7%), financial services (-18.2%), retail (-15.2%) and automotive (-11.4%).
3. Traditional media will fare far worse than online. Investment is set to fall by 16.3% – $51.4bn – this year, with declines recorded across cinema (-31.6%), OOH (-21.7%), print (-20.1%), radio (-16.2%) and TV (-13.8%).
4. Internet advertising is set to record mild growth this year (+0.6%) at a global level. However, a number of key markets will witness a fall. Social media (+9.8%), online video (+5.0%) and search (+0.9%) are all still expected to grow, though online classified – particularly recruitment – is set to fall (-10.3%).
5. A recovery is forecast for 2021, at +4.9%. This will still leave the value of global ad trade $21.9bn lower than its 2019 peak. Ad investment would need to rise 3.7% in 2022 to fully complete the recovery
WARC notes that any brands are currently assessing what the world will look like as lockdowns are lifted and consumers tentatively return to a “new normal.” They predict that, while advertising will recover from this shock (with global growth of 4.9% next year), it is certain that we will feel the economic impact of Covid-19 on the global economy for a generation.