Analysts at eMarketer have reforecast global ad spend for 2020, taking into account initial estimates of the impact of the coronavirus.
They are taking a cautious view, saying there are still many uncertainties regarding how fast and far COVID-19 will spread worldwide.
In 2020, eMarketer expects total media ad spending worldwide to rise 7% to $US691.7 billion from 2019. That’s a decrease from previous forecasts of a 7.4% increase over the 12 months to $712.02 billion.
The actual number could be downgraded dramatically, depending how ad spend goes later in the year, whether or not the Tokyo Olympics goes ahead and whether the world will face sustained economic contraction.
"Our downward revision is primarily due to one country: China, the epicenter of the COVID-19 outbreak," says analyst Jasmine Enberg.
"The first case was discovered there in late December 2019, so we have had more time to track the virus’s impact on the country’s ad market."
eMarketer expects total media ad spend in China to reach $US113.7 billion, down from previous forecasts of $US121.13 billion. China is the world’s second-largest ad market after the US.
"Out-of-home (OOH) ad spending could also feel a negative impact worldwide if the social distancing and isolation measures that have emerged in some cities expand to larger territories," says Enberg.
"Consumers in countries with significant numbers of reported COVID-19 cases are already actively avoiding large public places and gatherings, and that may eventually impact advertisers’ willingness to advertise there as well.
"For now, however, we are not making any other major adjustments to our ad spending forecasts because of the COVID-19 outbreak.
"Our forecasts are for the full year, and there is still a strong possibility that the virus could be contained in the coming months, allowing for a rebound in H2 2020. In most countries, the bulk of ad spending takes place in the latter part of the year for the holiday season.
"One factor that could cause us to re-evaluate our outlook is if the 2020 Summer Olympics in Tokyo are postponed or canceled. Even as organisers around the world have pulled the plug on many other major events, our forecast assumes that the Olympics will still take place in June, and we expect that to provide a boost in ad spending in the US and worldwide."
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