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Ad Spend Intelligence for Key Anglo Markets 2020

Author: James Fennessy

Digital Emerges Stronger with Higher Share

The global COVID pandemic has delivered the largest decline in ad spend yet seen in key advertising markets, with national ad spend in the Anglo Markets decreasing by 8% in 2020.  However, our data also shows that while the decline in ad spend has been at a record level, the market recovery is well underway with these markets reporting combined growth of +5% in the final quarter.

While the initial shock of the pandemic triggered a devastating 32% decline in second quarter ad spend, since then the market has been steadily recovering.  We saw the bottom of global advertising demand in Q2, after that the markets adjusted to a new `Covid normal’ the level of demand has begun to return with the total down just -6% for Q3 and then returning to strong growth of +5% in Q4.

And that final quarter advertising demand was also widespread, with the US market +6%, the AU market +5%, the UK market +3% and NZ +5% with only Canada reporting further market weakness (-6%).

Looking at full year, each country has reported large declines, with the US market being the only one to report a single digit fall (-7%) as all other markets reported double digit declines.

SMI Anglo Markets CY2020 Ad Spend Trends

Despite the overall market softness, it’s clear the Digital and Television media have fared better than others with Digital’s share of ad spend across these five markets lifting from +42% to +47% as actual spend grew +4%.

Television revenue was up 13% across all markets, but most affected by the pandemic were the smaller media such as Radio, Outdoor and Print.  And clearly the medium most affected by the pandemic in each of our markets was Outdoor as more people were forced to remain at home.  Similarly, in the print media COVID resulted in the closure of numerous titles as both small business and national marketers reduced their ad spend.

Digital’s increased share was mostly driven by strong growth in the US where its share of all media reached a high of 53% in the December quarter. In addition, the UK also contributed to the trend (Digital had its highest share of 51% in Q3), as did Canada where there’s been substantial Digital growth all year culminating in a share of 57% of all Canadian ad spend in the December quarter. But Television remains the largest share of national ad spend in each of the Australian and NZ markets.

US & Canada Experienced The Most Pronounced Upward Movement In Digital Allocation At +6 pts YOY, While NZ Saw The Least At +3 pts

The bulk of the higher Digital spending was reported in the fourth quarter as the combined markets grew the value of Digital bookings by +24% with each of the major Digital sectors reporting double digit levels of growth.

Programmatic platforms and Social Media websites reported the strongest quarterly growth of +30% and +27% respectively, and SMI also identified very strong increases in ad spend to Video-based websites with the quarterly total up +23%.

Anglo Markets – Digital Media Subtypes
Jan – Dec 2020 YOY
Investment Percent Change by Quarter

SMI also tracks the changing Product Category ad spend trends within each market, and above all, the largest growing Category across the combined markets this year was Pharmaceuticals (+17%) although that was mostly due to a surge in spending in the largest US market.  In addition, the CPG category spiked in Q4 (+33%) approaching the Holiday season.

Household Supplies And Food Sectors Were Common Drivers Of Incremental Spend Across Anglo Markets In 2020, While Travel And Entertainment Were Most Prevalent Detractors

In conclusion, the 2020 year clearly delivered unprecedented disruption for the media industry.  However, the worst is behind us and SMI will continue to report intelligence monthly on the ad spend and revenue, to support Marketers and industry growth in 2021.

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