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.