A just released Magna Advertising Forecast from IPG Mediabrands predicts 2020 adspend will drop 9.8% in EMEA, 8.5% in APAC, 4.4% in North America and 9.9% in Latin America—adding up to a global 7% drop equal to US$42 billion in lost revenue for media owners.
In dollar terms, spending will drop from from $582 billion last year to $540 billion. A 16% decline in linear ad sales (linear TV, print, linear radio, OOH and cinema), to $238 billion, will be mitigated by a 1% rise in digital spending, to $302 billion, the forecast said.
Among the worst-hit markets will be Japan and Spain (both down 14%), France (down 13%) and Italy (down 15%). Markets escaping with less damage include India (rising 2%), China (down 6%) and the US (down just 4%, thanks to anticipated election spending).
A glance through the predictions for linear media formats paints a grim picture:
- Linear TV will be down 12%
- Print ad sales will decline by 32%
- Linear radio advertising will decrease by 15%
- Out-of-home is expected to fall 22%
- Cinema advertising will lose 40%.
Looking to 2021, improvement in the global economy and the return of major sports events (the Summer Olympics and the UEFA Football Championship in Europe) will drive global adspend up by 6.1% to $573 billion. This breaks down as 7.1% growth for EMEA, 8.1% for APAC, 6.7% for LATAM and 4% for North America. However, the forecast notes that the global market will remain $9 billion in the red compared to its pre-COVID level.
APAC's expected 8.5% decline this year translates to a revenue total of $163 billion. Linear formats will shrink 16.5% while digital formats remain flat. In 2021, the forecast says, APAC advertising will rebound by 8.1% to $175 billion, not quite matching its 2019 total.
Yet APAC will remain the second largest global region behind North America, widening its lead on EMEA, which will see $131 billion in spending in 2020.
China and Japan will represent 68% of total APAC spending in 2020. The Indian sub-continent sees per capita ad spending of less than $10, but will account for much of the growth, with both India and Pakistan expected to gain 2%. Hong Kong will see the worst decline of 24% followed by Malaysia (down 18%), Philippines (down 17%), and Japan (down 14%).
“Advertising spend and growth in APAC continues to be driven by digital formats," Leigh Terry, CEO of IPG Mediabrands APAC, said in a release. "As budgets were adjusted to reflect the new post-Coronavirus economic reality, brands consistently prioritize spending that is easiest to attribute directly to sales. As a result, search and social as well as performance video remain the bastions of digital ad spending strength in APAC, demonstrating continued strong growth in ecommerce.”
Some other findings in the report:
- China: The 6% drop in media owner revenues in 2020 will be the first decline in the history of Magna's spending records. Digital spending will represent 69% of total spending in 2020. In 2021, the market will rebound by 6.8% to end slightly ahead of the 2019 total.
- Japan: Economic stabilization in 2021 and the Tokyo Olympics will help adspend grow 11%.
- Australia: Digital will represent 64% of total budgets in 2020, one of the highest global totals. In 2021, overall spending will increase 6.9%, but 2019 totals won’t be surpassed until the end of 2022.
- India: Almost all media formats are expected to see a return to growth in 2021; linear sales will rise 5% and digital by 17%, leading to overall growth of 9%.
- South Korea: Linear advertising will decline 21% in 2020, but digital advertising will grow by 3%. In 2021, adspend will bounce back 7%, but even by 2024, spending will only be 3% higher than it was in 2019.
- Indonesia: The advertising market will shrink by 12.6% in 2020. It will grow by 10% in 2021, but won't surpass the high-water mark of 2019 until 2022.
- Thailand: Adspend will decline by 8.9% in 2020. Digital formats, on the other hand, will increase by 4% this year, well below 2019’s 22% growth rate, but still robust in a global economic recession.
- Hong Kong: Linear advertising is expected to decline by 34% in 2020 and will represent just 65% of total revenues. Television will decline by 40%. Hong Kong’s advertising economy is not expected to surpass the 2018 high-water mark at any time through the end of the forecast period in 2024.
- Malaysia: Advertising revenues will decline by 18%, with linear advertising shrinking by 32% and digital spending growing by 8%.
- Taiwan: Advertising sales in Taiwan will decline by 2.6% in 2020 and grow 3.5% in 2021, surpassing the prior high of 2019.
- Philippines: The country's 17% decline in spending breaks down to a 19% decline in linear advertising and 6% growth in digital advertising.
- Singapore: Advertising sales will decline by 5.5% in 2020, with linear advertising declining by 9% and digital spending increasing by 5%.
- New Zealand: The advertising economy will decline by 8%, with linear ad formats declining by 14% and digital media flat. In 2021, the market will rebound by 7%, but it will take until the end of 2022 to match 2019 spending.
- Vietnam: Ad revenues will decline by 5.8% in 2020, with linear media declining by 9% and digital sales growing by 15%.
- Pakistan: Linear spend is expected to decline 5% in 2020 while digital formats will continue to see double-digit growth (18%). Total advertising in 2021 will grow by 2%, still slightly below the 2017 peak.