Global ad spend is forecast to grow 4.3% in 2020, according to Zenith Media. Demand is largely driven by online video and social media. However, audiences by media owners are going to decline 1.6% which will hike prices by 6.1%.
As demand for advertising continues to grow, brands are modulating their efforts to expand reach whilst small brands are looking to grow their business.
Digital advertising has also opened the playing fields for smaller brands that have not previously used advertising. Ad expenditure grew 5.1% on average since 2010.
Yet, audiences are declining particularly in areas such as TV because of subscription video services such as Netflix and HBO.
Ad blockers are also putting a dent in reach. In combination, these factors are driving up prices.
The supply of commercial audiences decreased by 1.3% since 2010.
“The days when we could find audiences all in one place are long gone. Now, however, technology empowers us to find them wherever they are, online or offline, and win back value for our clients through efficiency and effectiveness – by ensuring that we target and reach consumers with the right message at the right point in the consumer journey,” said Matt James, Global Brand President at Zenith.
Online video and social media are the fastest-growing channels between 2019 and 2022, growing at 16.6% and 13.8% annually, respectively.
For 2020, Zenith Media expects ad spend to see an uplift thanks to major events such as the Summer Olympics, the UEFA Euro 2020 and US Presidential elections. These could fuel an additional $7.5 billion in the global ad market.
At the same time, US-China relations remain a major pain point and have raised uncertainty among many marketers. This could cost the industry 1.1% in growth next year.
The US ad market is forecast to grow by $39.1 billion between 2019 and 2022 whilst China will increase $10.3 billion.
Together, they are going to account for 56% of all growth in ad expenditure over the next three years.
Chinese ad spend is predicted to rise 4.1% in 2020 compared to 4.8% in the US.
Ad spending in India is predicted to increase by $4.3 billion between 2019 and 2022.
“As geopolitical tensions wipe out most of the expected gains from sport and elections, 2020 will be a disappointing quadrennial year for the ad market,” said Jonathan Barnard, Zenith’s Head of Forecasting. “If the trade war is settled, we are more confident for 2021, forecasting 4.5% growth in global adspend despite the absence of the quadrennial events.”