Mobile ad revenue growth to stagnate in 2020 amid economic consequences of pandemic

Advertising revenues among media publishers are expected to drop $42 billion in 2020 to $540 billion due to declines in ad spending among the Covid-19 crisis and a subsequent recession.

According to new data released by Magna Global, global ad revenues could decline as much as -7%.

However, digital and mobile advertising formats such as search, video, social and banner ads are expected to be flat at a small growth of 1% to $302 billion.

Magna expects the second half of the year to buffer against declines during lockdown.

Mobile net ad revenues in the US are expected to grow just 8.6% in 2020 compared to 26.2% last year. For 2021, Magna expects revenues to pick up slightly to 12%.

Search continues to be a dominant mobile and digital ad format ($142 billion), while social media will slow compared to growth seen during previous years.

Static banner ad revenues are expected to drop -11% amid pandemic woes.

“Beyond the short-term V-shaped recession/recovery impact on the economy and the advertising market, the COVID crisis will have global and long-term effects on society, business models, consumption habits, mobility and media usage, all factors pointing to a more subdued economic growth and advertising spend than previously forecast for the 2022-2024 period. MAGNA thus reduces its global advertising growth forecast for these three years, from +4.5% per year to +3.5% year. The global ad market will reach $647 billion by 2021 compared to $745 billion in our previous long-term scenario (a -14% decrease),” Magna wrote.

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