Magna has cut its advertising spend forecasts for 2020 taking into account the impact of the coronavirus pandemic.
The IPG unit now expects a 2.8% fall in US ad sales this year. It had previously predicted 6.6% growth.
“The impact on business and marketing activity will vary across industries, depending on how much demand and investment will be delayed, as opposed to destroyed, during this crisis,” says Vincent Letang, exec VP, global market research at Magna.
The biggest impact will be for the travel, restaurant and movie industry, according to Magna.
Retail, finance and automotive brands will also be significantly pressured. Home entertainment and e-commerce have the potential to be two bright spots in the marketplace.
“The current situation is totally unprecedented, but the closest historical equivalent would be a combination of the Great Recession and 9/11; a brutal economic downturn and a Black Swan national disaster,” says Letang.
“Its effects on supply, demand and media consumption are more complex and widespread than in any ‘normal’ economic recession in the past, and some of them will outlast the current crisis. Nevertheless, there will be an after.”
Magna anticipates the market will stabilise and rebound in the second-half of the year and forecasts moderate growth in 2021. It is now calling for a 2.5 percent increase in ad sales next year, up from its previous forecast of 1.4 percent.
The uptick will come from delayed consumption and the postponement of the Tokyo Olympics, along with low comparisons from 2020.
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