Adspending globally degrows only 1.2% in 2020!

24 May,2021

 

By Indrani Sen

 

Indrani SenLast week, I read an article “How the pandemic changed worldwide ad spending” by Etham Cramer-Flood on emarketer.com. The article compared the forecasts made by them with the revised estimates and spoke about their predictions for 2021. The reason I would like to share the highlights of that article here is due to the optimistic attitude reflected in their calculations. They pointed out that according to their analysis, the final figures for 2020 “outperformed dire mid-pandemic projections.” According to this article, the global adspending has a degrowth of only 1.2% in 2020 which is the lowest among all the various estimates seen till now. (https://www.emarketer.com/content/how-pandemic-changed-worldwide-ad-spending?ecid=NL1001)

 

As shown in the above chart, after a contraction of 1.2% in 2020, the global ad pending is predicted to grow by 15.0% in 2021. Even traditional adspending will grow this year, by 7.6%.  The growth rate will come down to 10.2% in 2022 and subsequently over next two years will fall down to 7% in 2024 compared to 7.5% growth rate of 2019. By the end of 2024, ad spending worldwide is expected to be close to $1 trillion.

 

All the various estimates on global advertising spending released so far agree that while the ad spending on traditional media suffered a huge degrowth, the overall situation was saved by growth of adspending on digital media with the share of digital advertising varying from one research to another. Traditional media were already in slow declining mode across various countries in the pre-pandemic years. The pandemic aggravated their degrowth. As the article does not have a chart showing the share of different medium in worldwide advertising spend. I have sourced one chart from www.statista.com with the medium-wise distribution of global advertising spend in 2020 which is shown below:

 

Distribution of advertising spending worldwide in 2020 by medium

Source: https://www.statista.com/statistics/376260/global-ad-spend-distribution-by-medium/

 

The www.statista.com has estimated that in 2020, the shsre of digital advertising in the worldwide advertising has touched 51.%. The balance 49% is distributed among the traditional media with TV leading the pack with 28% share followed by newspapers 6%, outdoor 5%, radio 5%, magazines 4% and cineam 0.4%. The analysis of www.emarketer.com agrees that globally the share of digital advertising spend may touch 60% by end of 2021 and 70% by 2025.

 

 

The pandemic has surely accelerated the growth of digital media across the world in the middle of major economic disruptions.  We have also been surprised by the kind of resilient growth of digital advertising in India showed in 2020. However, it will take at least this decade before the share of digital advertising in India can have the highest share in the Indian advertising pie.

 

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