GroupM Predicts 13 Percent Decline in 2020 U.S. Ad Spend

Global ad market (YoY growth) according to GroupM:
1) 2012 – $408.0B
2) 2013 – $421.7B (↑ 3%)
3) 2014 – $437.7B (↑ 4%)
4) 2015 – $458.3B (↑ 5%)
5) 2016 – $482.9B (↑ 5%)
6) 2017 – $516.2B (↑ 7%)
7) 2018 – $552.7B (↑ 7%)
8) 2019 – $587.0B (↑ 6%)
9) 2020P – $517.5B (↓ 12%)
10) 2021P – $559.8B (↑ 8%)
11) 2022P – $586.4B (↑ 5%)
12) 2023P – $607.6B (↑ 4%)
13) 2024P – $633.1B (↑ 4%)

Global GDP vs. global ad spend according to GroupM:

YoY growth for the U.S. ad market:
1) 2009 – ↓ 16%
2) 2020 – ↓ 13%

Quote from Brian Wieser – Global President, Business Intelligence @ 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.”

Flashback: Political Ads Expected to Explode, Even as Economy Tanks

Wow: The political video ad market is growing (CAGR) at a rate of 26%!

Global TV ad market (YoY growth) according to GroupM:
1) 2012 – $154.3B
2) 2013 – $158.8B (↑ 3%)
3) 2014 – $163.1B (↑ 3%)
4) 2015 – $164.0B (↑ 1%)
5) 2016 – $166.8B (↑ 2%)
6) 2017 – $165.2B (↓ 1%)
7) 2018 – $165.8B (↑ 0%)
8) 2019 – $164.5B (↓ 1%)
9) 2020P – $135.5B (↓ 18%)
10) 2021P – $143.5B (↑ 6%)
11) 2022P – $146.4B (↑ 2%)
12) 2023P – $149.2B (↑ 2%)
13) 2024P – $153.0B (↑ 3%)

Big question #1: How big of an impact is this slowdown having on ad prices?

Scatter ad prices (YoY growth) for big 3 TV networks, according to SQAD:
1) 2019-Q2 – $142K
2) 2020-Apr – $102K (↓ 28%)

Big question #2: Do buyers believe that we have hit bottom yet?

Share of buyers that believe that ad spending has bottomed out according to Pivotal Research Group:
1) April – 51%
2) May – 57%

More #1: The TV Commercial, Once Advertising’s Main Event, Suffers in the Pandemic

More #2: The History Of Advertising In A Recession

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