Magna-GLOBAL-AD-FORECASTS-DECEMBER-2020-SUMMARY-PRESENTATION_61页_2mb

Global Advertising Landscape - December 2020 Summary

Core Content Overview

This document provides an update on MAGNA's global advertising forecasts for December 2020, highlighting the impact of the COVID-19 crisis on the advertising industry across different regions and formats. It outlines key findings, economic conditions, media trends, and future projections for 2021 and beyond.

Key Findings

• 2020 Performance:

  • Global advertising revenues (linear + digital) fell by -4.2% to $569 billion, a decline of $25 billion from 2019.
  • Digital advertising showed resilience, growing by +8% while linear advertising experienced a significant drop of -18%.
  • Top-performing verticals in 2020 included retail, finance, tech, and pharma, while travel, automotive, restaurants, cinema, and drinks were the hardest hit.
  • US saw a -1% decline, China grew by +2%, and Russia by -3%.
  • India and Latam were the worst performers, with declines of -16% and -10%, respectively.

• 2021 Outlook:

  • Global GDP is expected to rebound by +5.2% after vaccination, though economic uncertainty remains.
  • Digital ad sales are projected to grow by +10.4%, while linear ad sales rebound slightly to +3.5%.
  • The Tokyo Olympics and UEFA Football tournament are expected to drive incremental spending.
  • Total ad market growth is forecasted at +7.6% for 2021.

• Long-term Forecast (2022-2025):

  • The global advertising market is projected to reach $730 billion by 2025, significantly above pre-COVID levels.
  • Digital media is expected to capture 70% of total ad budgets by 2025.
  • Linear media is unlikely to return to pre-COVID levels in most markets.
  • The economic impact of the pandemic will have lasting effects on lifestyles, consumption, and business models.

Economic Environment

• The COVID-19 crisis triggered a global recession, with GDP down by -4.4% in 2020.
  • US GDP fell by -4%, Western Europe by -8%, while China grew by +2%.
• Media owners' Net Advertising Revenues (NAR) dropped by $25 billion to $569 billion, showing the overall impact of the economic downturn.
• Digital advertising is almost immune to macroeconomic performance, driven by organic growth and consumer behavior shifts.
• Linear media is more susceptible to economic cycles, with TV and print being the most affected formats.

Global Ad Trends

• Digital dominance:
  • Digital ad spend is expected to grow to 70% of total budgets by 2025.
  • Mobile advertising is set to represent 73% of digital ad spend in 2020, increasing to 86% by 2025, and 60% of total ad spend by 2025.
  • Programmatic advertising is projected to account for 78% of display/video ad spend by 2024.
• Linear ad formats:
  • TV saw a -12% decline in 2020, radio by -28%, print by -30%, and OOH by -16%.
  • Cinema experienced a -80% drop in ad sales.
• Regional performance:
  • US remains the largest ad market, followed by China, Japan, UK, and Germany.
  • India and Brazil are expected to grow significantly in 2020 and 2025, respectively.

Key Markets

• India is the only large market to perform worse than expected in 2020, with a -16% decline in ad spend.
• Brazil and India are expected to climb in rankings by 2025.

Key Media

• Digital media continues to lead in growth, especially social and video formats.
• Mobile advertising is the fastest-growing segment, with a projected 73% share of digital ad spend in 2020 and 86% by 2025.
• Programmatic advertising is becoming increasingly dominant, expected to account for 78% of display/video ad spend by 2024.
• Linear media (TV, radio, print, OOH) is shrinking, with TV being the most resilient among linear formats.

About MAGNA

• The report is prepared by MAGNA Intelligence, with contributions from the Analyst Team.
• Vincent Letang covers Western Europe and US, Luke Stillman covers APAC and Eastern Europe, Michael Leszega covers US and Canada, and Michelle Bovee covers EMEA, Brazil, India, and Japan.
• The US report and Global report are scheduled for March 2021 and June 2021, respectively.
• Additional insights, market profiles, and infographics are available on atlas.magnaglobal.com.

Additional Reports

• Influencer Report (April 2020)
• Asian Americans Report (February 2020)
• Programmatic Report: Life Without Cookies (May 2020)
• Political Advertising 2020 (June 2020)
• US Advertising Forecast (June 2020)
• Persistence of Time: COVID Edition (June 2020)
• Global Advertising Forecast (June 2020)

Summary of Market Resilience

• Ad resilience is correlated with economic performance, with digital showing stronger resilience than linear.
• China and India are expected to grow significantly in the long term, while Latam and EMEA show mixed results.
• Sports events and economic recovery are key drivers for ad market rebound in 2021.
• Digital formats are expected to dominate the ad spend landscape by 2025, with 70% of total budgets allocated to digital.