UK advertising spend is forecast to have its weakest second quarter since records began. Predicted ad spend in Q2 2020 is down 39.1% year on year (YOY), in stark contrast to the first quarter rise of 4.6%.
As a result The Advertising Association/WARC Expenditure Report has amended its 2020 forecast to predict a decline of 16.7% in ad spend for this year. However this is still based on the premise that we don’t have a second spike in COVID-19 infections and that there is a gradual return to marketplace normality.
To read more about this research click here to view the full article on WARC.
23 Media Audits Comments – Q2 2020 & Beyond
It is this key element of a ‘return to normality’ which brands must take into account as we look at the forecasts beyond the halfway stage for 2020 and into 2021. All these medium term predictions are currently based upon the orderly scenario of businesses reopening and a subsequent solid economic recovery.
So far 2020 can only be morbidly, yet accurately, described as a “blood bath” and the optimistic bounce back in Q3 & Q4 has been downgraded to reflect a gradual rather than immediate return to normality.
However at 23 Media Audits, we anticipate an even slower return with a number of smaller waves of the epidemic throughout the rest of 2020. In fact we don’t expect any increase until a vaccine is rolled out nationally and we see the benefit of large % increases in 2021. We believe the current WARC forecasts for next year will not replace the major losses of 2020 and it will actually take all of 2021 and part of 2022 as well to do.
Our intelligence shows TV will continue to be hit hard over the last six months of the year across revenue (not viewing), causing market deflation and cheaper prices for advertisers to reach their audience. This has led to 23 Media Audits forecasting full-year 2020 TV will be down -26 % compared to a pre-COVID-19 figure of +1% at the start of 2020.
We still predict revenue covering search, mobile, programmatic display and video to be down for 2020 at -10%, keeping the overall spend figures at a negative level and contributing to the total media spend down -19% for 2020.
Radio, OOH and Cinema, which combined account for 11.1% of the total advertising market, are predicted to suffer further decreases (-35% collectively).
Finally we are expecting an additional drop in the print market of -24% across Magazines, National and Regional print combined (including their digital revenues).
Overall, we expect the market to be down 19% as COVID-19 slows growth.