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The damage to global adspend in 2020 caused by the coronavirus downturn will have a less severe impact than that of the financial crisis of 2009, a new forecast from Warc has found.

Warc’s report, published today, said global adspend will fall by 8.1% this year to $563bn, compared with the 12.7% contraction in 2009.

The research organisation said record-high spending during this year’s US presidential campaigns will stymie the US ad market decline to 3.5% in 2020, while stronger-than-expected first-quarter results showed that key media owners were in relatively good health heading into the dire second and third quarters.

The UK is second to France in terms of adspend declines in major European countries. UK adspend is forecast to shrink by 16.4%, compared with a decline of 18.7% in France. Germany is expecting a 6.1% fall.

Before the global pandemic took hold and caused economies and societies to go into varying degrees of lockdown, Warc had forecast in February that global adspend would grow by 7.1% this year.

Warc now said traditional media will fare far worse than online, with ad investment set to fall by $51.4bn (down 16.3%) this year. Declines will be recorded across cinema (-31.6%), out-of-home (-21.7%), magazines (-21.5%), newspapers (-19.5%), radio (-16.2%) and TV (-13.8%).

For online advertising, growth will slow to just 0.6% in 2020, while social media (9.8%), online video (5.0%) and online search (0.9%) are expected to record growth but at far lower rates than Warc previously projected. Online classified is set to fall by 10.3%. 

Meanwhile, in terms of sectors, the travel and tourism category is expected to record the steepest decline, with a forecast of -31.2% for 2020 representing a $7.2bn reduction in spend compared with 2019 to a total of $16.0bn.

Leisure and entertainment (-28.7% to $16.4bn), financial services (-18.2% to $39.2bn), retail (-15.2% to $57.2bn) and automotive (-11.4% to $57.6bn) are all set to witness sharp declines this year.

Trends by platform

• Alphabet: advertising revenue across Google Search, YouTube and Google Network Members (third parties that host Google ads) is forecast to rise by just 1.6% to $137.1bn this year – the company accounts for almost one in four dollars (24.4%) spent on advertising worldwide. 

• Facebook: advertisers are expected to spend $77.6bn across Facebook, Messenger, WhatsApp and Instagram this year, a rise of 11.5% from 2019. This marks a downgrade of $5.3bn from the pre-outbreak forecast and gives Facebook a 13.8% share of global advertising investment.

Trends by media and format

• TV: spend is forecast to fall 13.8% to $159.9bn, accounting for 28.4% of all global spend this year. A third of the global TV total is in the US, where TV spend is set to fall 9.6% ($5.8bn) to $54.7bn, despite a boost from presidential campaign spending.

• Out-of-home: spend is expected to fall by 21.7%, or $8.7bn, in 2020 compared with a previous forecast of 5.9% growth.

• Cinema: brand investment is set to fall by almost a third (-31.6%) this year, but Warc thinks the sector should recoup these losses in 2021.

• Radio: investment is projected to fall by 16.2% – or $5.1bn – this year, compared with a pre-outbreak forecast of 1.8% growth.

• Newspapers: spend on print newspapers is forecast to fall by $7.6bn, or 19.5%, in 2020, compared with a pre-outbreak forecast of -5.9%.

• Magazines: advertiser spend will fall by more than a fifth (-21.5%), or $3.4bn.

• Social media: social formats combined are expected to be the strongest performers in 2020, recording total growth of 9.8% to $96bn. This does, however, represent a downgrade of $6.4bn when compared with Warc's pre-outbreak forecast.

• Online video: growth is forecast to slow to 5.0% (to $50.3bn) this year, equivalent to 8.9% of global adspend.

• Search: growth will ease to 0.9% in 2020 after a downgrade of $14.1bn from February's forecast.

Trends by region

• Europe: European adspend is forecast to fall by 12.2% ($18.1bn) to $129.9bn this year, with France leading key market decline at 18.7% (down $3.1bn to $13.4bn). The UK (-16.4%, down $5.1bn to $31.3bn), Germany (-6.1%, down $1.5bn to $24.9bn), Spain (-6.0%, down $500m to $6.6bn), Italy (-21.7%, down $2.1bn to $7.6bn) and Russia (-12.3%, down $1.2bn to $8.5bn) will also record sharp falls.

• North America: region where 39.5% of global adspend is transacted. Ad investment is expected to fall by 3.7%, or $8.5bn, to $222.5bn this year, encompassing a 3.5% fall in the US (down $7.7bn to $221.3bn) and a 6.5% dip in Canada (to $11.5bn). This compares with pre-outbreak forecasts of 8.8% and 1.9% growth respectively.

• Asia-Pacific: adspend is expected to fall 7.7% ($14.4bn) to $173.5bn in 2020, accounting for 30.8% of the global total. China (-8.6%, down $7.5bn to $80.0bn), Japan (-6.4%, down $2.5bn to $36.2bn) and Australia (-8.2%, down $1.1bn to $11.9bn) are all set to record declines. Indian growth will ease to 0.7% to $9.4bn in 2020.

• Latin America: adspend is set to drop 20.7% (by $5.6bn) to $21.4bn this year, led by a sharp decline in Brazil (-22.5%, down $3.4bn to $11.5bn), where the Covid-19 outbreak has been particularly acute.

• Middle East: while not as severely impacted by coronavirus as other regions, adspend is still set to fall 15.1% (by $1.8bn) to $10.4bn in 2020, as oil-rich economies suffer from falling commodity prices.

• Africa: spend is expected to decrease by 19.5% to $5.3bn this year, although this could be more severe if the outbreak worsens in the region.