Digital now more than half of global adspend

Digital advertising will account for more than half of global adspend in 2020, thanks to a shift to digital platforms driven by lockdowns around the world, according to Zenith’s latest Advertising Expenditure Forecasts.

The media agency already predicted digital would hit this milestone by 2021, but it has now revised its forecast for digital’s share of the market this year from 49.5% to 51%.

Jonathan Barnard, head of forecasting at Zenith, said: "The coronavirus forced brands to embrace digital advertising even faster than expected and made digital transformation of businesses more urgent than ever. This year will be the first in which digital advertising will attract more than half of total global adspend—a milestone we previously expected in 2021."

The market as a whole will decline by 9.1% this year, Zenith said—close to the 9.5% dip seen in the recession of 2009 following the global financial crisis. The agency forecasts a recovery next year of 5.8%, boosted by the rescheduled Tokyo Olympic Games and Uefa Euro 2020.

In December 2019, before the world became aware of the emergence of the coronavirus in China, Zenith forecast that global adspend this year would grow by 4.3%.

But this year’s overall decline—and next year's recovery figure—hides sharp differences between regions of the world and different kinds of media.

Asia-Pacific’s market will shrink by 8%, with the damage mitigated by the relatively successful efforts of many countries in limiting the impact of the pandemic.

North America will see the smallest decline of 7%, thanks to record political spending as Donald Trump battles to hang on for a second term as US president.

In western Europe, adspend will fall by 15%, after advertisers made aggressive cuts in the second quarter of the year. Adspend will fall by 8% in central and eastern Europe, 13% in Latin America and 20% in Middle East and North Africa.

Despite advertisers increasing the proportion of their budgets going to digital channels, they are not immune from the recession in the market, and will shrink by 2% this year. But Zenith said the shift in share would continue, with digital now expected to account for 54.6% of global adspend by 2022.

TV and radio will be the best performers among traditional channels, with declines this year of 11% and 12% respectively—although they will only recover by 2% and 1% in 2021, leaving them substantially smaller than in 2019.

Out-of-home and cinema, the two channels most affected by changes to social behaviour, will see their markets shrink by 25% and 51% this year, before rebounding by 16% and 65% respectively in 2021—although in each case not enough to return to 2019 levels.

Print, meanwhile, faces the bleakest outcome, with newspaper advertising set to fall by 21% this year and magazine advertising by 20%—and both of these are set to decline further in 2021. These figures do not include the digital revenues of news brands and magazines, however.