Olympics, Euros and US elections spark ad spend growth in 2020
- Global events boost ad spend growth to 3.9% in 2020, up from 2.6% in 2019.
- Underlying trends paint a more nuanced picture with emerging economies in APAC and Latin America powering growth, while some developed markets will see declining growth as risk of recession gains momentum.
- Digital ad spend remains a key driver of growth and is breathing new life into traditional formats, such as radio and TV.
22nd January 2020. Dentsu Aegis Network’s latest advertising spend forecasts, based on data from 59 markets, predicts global growth of 3.9% in 2020, amounting to US$615.4 billion and building on growth of 2.6% in 2019.
With the Tokyo Olympics and Paralympics, UEFA European Football Championships and the US Presidential elections all taking place in 2020, events will be a significant driver of increased ad spend around the world as advertisers look to capitalise on huge global audiences.
However, underlying trends paint a more nuanced picture. Our forecasts show declining spend in Germany (-1.5%), Italy (-0.1%) and Spain (-1.3%) while developing markets such as India are forecast double-digit growth in 2020. The forecasted decline in Germany, Italy and Spain is linked to ongoing political uncertainty and weakened economic forecasts in these markets. In India growth is driven by digital which is in part powered by booming smart phone adoption. Latin American spend is also growing rapidly driven by digital spend. In Argentina growth is forecast at 16% for 2020.
Digital continues to power ad spend growth in 2020 and is forecast to grow 10.5%, reaching US$276 billion and 45.7% of global spend. Growth remains strong into 2021 putting digital’s share of ad spend at nearly 50% at the start of the new decade. Within digital, mobile and video are fuelling growth. Both are forecast double-digit growth in 2020 at 16.5% and 14.6% respectively.
Digital is also breathing new life into traditional formats, with television and radio showing signs of recovery with a return to growth in 2020. TV is predicted to maintain around one-third (31.5%) of global ad spend share, growing at 0.6% this year. Radio too is forecast to grow at 1.7%. Voice assistants, addressable TV and programmatic ads are driving spending in these more traditional mediums.
Peter Huijboom, Global CEO Media at Dentsu Aegis Network, said:
“There is a lot to look forward to in 2020. Our forecasts point to a boost in ad spend as we enter a year of important political and sporting events including Tokyo Olympics and Paralympics, UEFA European Football Championships and the US Presidential elections.
Looking at local trends the picture is more mixed with some key markets slowing down while emerging economies are powering up. Across the media landscape we are seeing continued transformation - in digital, in mobile and across traditional formats like radio and TV where digital is now having an energising effect.
Marketers in 2020 need to manage these contrasting dynamics; long and short term, global and local, digital and traditional. Ultimately, they need to remain focused on long-term sustainable growth by winning, keeping and growing their best customers.”
Figure 1: Growth in global advertising spend 2019-21f
Figure 2: Share of global ad spend by media, 2019-21 (% y-o-y)
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