The ad market’s decline in the US is abating after the pandemic freefall that began in late March, according to mid year numbers and forecasts by GroupM.
The global media agency is forecasting a 13% decline in the ad market in 2020, excluding political advertising, followed by 4% growth next year.
Including political advertising, which is forecasted to expand massively in the US during national elections this year, the advertising market will fall by only 8% in 2020.
But short and sharp hit to the ad spend canary caused by the coronavirus lockdown doesn't, at the moment, look as bad as the prolonged fall during the GFC a decade a ago.
"For context, a 13% decline will not be as bad as the 16% drop seen in the 2009 financial crisis," says GroupM.
"That we 'only' expect a 13% decline is surprising. We might normally expect that because the 2020 economic decline is so much worse than 2009, advertising should be much weaker."
In nominal terms, GDP fell in 2009 by 1.8%. In 2020, it will probably fall by something closer to 4%.
The downturn in 2009 downturn played out over months, as financial institutions ground to a halt.
By contrast, in 2020, during March most conventional in-store retail activity ground to a halt, as did tourism, hospitality and place-based entertainment industries.
But most other economic activity continued, and over the course of weeks, a significant amount of retail and hospitality activity returned.
Large brands that initially paused spending retained substantial portions of their budgets, even as many small businesses saw their operations devastated.
Many transitioned their operations online and supported those operations with related digital media spending.
GroupM's US forecasts:
Digital advertising is expected to decline by only 3% during 2020 or be flat including political advertising. A rebound in 2021 with underlying growth of 12%.
Television advertising is expected to decline by 7% in 2020 and fall by another 12% next year.
Print media is expected to fall 26% in 2020 and a further 20% in 2021. "We presume publishers generally disinvest in their operations, aside from a handful of premium news publications."
OOH advertising to fall by “only” 21% this year, with second quarter cuts to spending more muted than other markets around the world.
Audio media is expected to fall by 24% this year and another 7% next year.
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