Out-of-home ad spending is expected to grow by just 0.7% in 2020, as opposed to the previously estimated 2.5%. Fewer people are leaving their homes, translating to lower demand for outdoor ads.
Digital spending is a bit more insulated, but it will still take a hit. Our Q3 2019 forecast predicted 15.2% growth in digital ad spending this year, totaling $86.30 billion. Now, however, we are expecting growth of 13.0%, with spend reaching $81.06 billion.
“Overall negativity and more cautious spending from advertisers mean that digital ad spending will not be immune to the coronavirus,” Lau said. “But the impact is less severe than traditional media, mostly because mobile ad spending is still showing strong growth. This is in part because people are shopping online more during the outbreak. They are also turning to online news sources for information about the outbreak. These factors will buoy advertisers’ appetite for digital ads.”
It is important to note that, while some effects of the coronavirus are apparent, the full impact on the broader Chinese economy—and thus on ad spending—have not yet been felt. We currently expect that there will be a return to business as usual in H2 2020. If that doesn’t materialize, our Q3 2020 forecast could revise these figures even further downward.
We can already see China dragging down ad spending globally. In 2020, we expect total media ad spending worldwide will reach $691.7 billion, up by 7.0% from 2019. That’s a decrease from our Q3 2019 forecast when we expected worldwide ad spending to rise by 7.4% to $712.02 billion this year.