Similar to many sectors, Covid-19 has been a disaster for the advertising and marketing industry globally as evident from falling ad spend and marketing budget. The latest forecast from WARC hints at 10.2 percent drop or $63.4 billion in global ad spend in 2020, which includes campaign spending during the US Presidential elections. Adjusted for inflation and measured in purchasing power parity (PPP) terms, the global advertising market is expected to contract by 11.4 percent this year. Global ad spending is expected to rise by 6.7 percent in 2021, and the organization has also forecasted that it will take until 2022 to recover to 2019's level of spending.
Marketing budgets across all regions have recorded sharp and sustained cuts with the spread of the virus. WARC’s recent report also highlights that where online formats also suffered contraction, the offline media were most adversely affected by the downturn. Pakistan’s ad community has also faced the harsh realities of Covid-19 on advertising budgets and spending and follows the lobal trends. Media sources tell BR Research that overall spending by the advertisers is likely to fall by around $50 million in FY21 where the largest decline so far has been witnessed in below-the-line (BTL) advertising. Whereas the digital landscape is likely to attract most spending in FY21 and beyond. Media spending currently is split between ATL modes like TV, digital, radio, print, and BTL modes like out-of-home, and brand activation.
This is also reflected in WARC’ analysis of global advertising industry where digital channels is set to dominate media budgets while the outlook for traditional channels is down. In terms of sectors for advertising where recovery is expected across all segments – albeit small – sectors that are the hardest hit are expected to record the highest growth such as tourism and retail.
A one liner: The pandemic has changed the way advertising is done. One emerging trend from how advertisers have performed during the Covid times is the rise in programmatic advertising, which is buying digital ad space using AI in real-time. This essentially means buying display space using machines and algorithms versus the traditional method that includes tenders, bidding, quotes, and human negotiation. Digital advertising is estimated to half of global advertising sped with Programmatic advertising spend expected to claim over a third of digital advertising by the end of 2020.
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