Zenith Raises U.S., Global 2020 Ad Forecasts on Olympics, Political Spend

Zenith Raises U.S., Global 2020 Ad Forecasts on Olympics, Political Spend

08 Dec 2019 (PT)

But the media planning firm said the U.S.-China trade war would drag down overall advertising expenditures worldwide as it disrupted the global economy.

Global advertisers will increase their advertising spend by 4.3 percent to $666 billion in 2020, Zenith said Sunday in its latest forecast as it pointed to increased ad expenditures on the Summer Olympics and the U.S. presidential election.

But while demand for mass audiences rises, the media supply will continue to fall as consumers steadily move from traditional cable TV and partly to Netflix, Amazon Prime, HBO, and eventually Disney+ and other forms of non-commercial TV content, the media forecaster said.

"The days when we could find audiences all in one place are long gone. Now, however, technology empowers us to find them wherever they are, online or offline, and win back," Matt James, global brand president at Zenith, said in a statement.

Zenith points to North America's ad market being buoyed by new small and medium-sized companies using Facebook and Google to advertise for the first time, as well as digital- native brands using both digital and traditional media to boost awareness. "The U.S. economy seems relatively robust, with a strong labour market and hehy consumption, though arguments over international trade continue," the media firm's report says.

Other Zenith findings include 2020 promising to be a bumper year for global ad spending with the Summer Olympics in Tokyo, the UEFA Euro soccer tournament in Europe and the U.S. presidential election alone accounting for $7.5 billion in advertising spending.

But next year's politics and sports spending by global advertisers will be tempered by the impact of the continuing U.S.-China trade war disrupting the global economy and its supply chains. "This is reducing growth and raising uncertainty, making advertisers more cautious about budgeting," Zenith said in its report as it put the economic headwind for the global ad market at 1.1 percentage points of lower growth in 2020 -- from 5.4 percent to 4.3 percent.

And Zenith's estimated 4.3 percent growth next year is in line with the media planning firm's estimate for 4.3 percent growth for 2019 made last June. The impact of their trade dispute only underlines how the U.S. and China jointly underpin global ad spending growth as Zenith predicts advertising expenditures in the global economy will grow for the next three years.

The U.S. ad market is forecast to grow by $39.1 billion between 2019 and 2022, while China is estimated to grow by $10.3 billion during the same period. Together they will account for 56 percent of all growth in ad expenditure over the next three years, Zenith said.

China's growth rate is slowing, however, as its ad market matures, says Zenith. After years of being a production-led, high-growth economy, China is transitioning into a consumer-led developed economy, and its ad market is becoming more similar to other developed economies, the report adds.

Source: Hollywood Reporter

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Zenith Raises U.S., Global 2020 Ad Forecasts on Olympics, Political Spend
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