Television will see zero growth in advertising revenue over the next three years, and 2020 is set to be a disappointing year for the ad market in general, with geopolitical uncertainty wiping out the benefit of quadrennial gains from sport and the US electoral cycle, according to a gloomy assessment of the global ad market by Zenith.
According to the research outfit, price inflation in TV advertising will counterbalance declines in global audiences. Online video and social media will remain the fastest-growing ad channels over the next three years, growing by 16.6% and 13.8% a year respectively thanks to continued increases in consumption of advertising on smartphones.
Zenith predicts that global advertisers will increase ad spend by 4.3% next year, but the commercial audiences supplied by media owners will shrink by 1.6%, fuelling a 6.1% increase in media prices.
According to Zenith, TV audiences turning to streaming services such as Netflix has reduced available audiences for advertisers and increased fragmentation, while the use of ad-blockers means that many have little exposure to digital advertising. Media prices have risen by an average of 6.5% a year since 2010, while the supply of commercial audiences has shrunk by 1.3% a year.
While the US and China are expected to account for 56% of all growth in ad expenditure over the next three years, Chinese growth is slowing down to an expected 4.1% next year compared with 4.8% in the US. India will be the third biggest contributor to growth, with growth of 12.4% predicted for next year.
Western and central Europe is expected to see growth of just 1.7% in ad spend this year, rising to 2.8% in 2022,ith weak economic growth contributing to a softening of the market.
Despite its economic slowdown, the UK ad market is expected to grow by 4.9% next year, up from 3.2% in 2019, driven by strong digital spending. Digital ad spend is expected to account for 71% of the UK total in 2022, making it the first country in the world where digital accounts for over 70% of total ad spend.
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10 July 2020 @ 13:08:09 UTC