The COVID-19 Impact on Advertising Spend

The COVID-19 Impact on Advertising Spend

5 minute read

In its May 2020 Ad Trends report WARC published its predictions about the ad spend. Here are the key takeaways from the report:

  • Advertising investment is set to fall 8.1% – $49.6bn – worldwide this year.
  • This year’s downturn will be softer than in 2009, when the ad market fell by 12.7% ($60.5bn).
  • Almost all product sectors will record a decline in ad investment this year.
  • Internet advertising is set to record mild growth this year (+0.6%) at a global level, though a number of key markets will witness a fall.
  • A recovery is forecast for 2021, at +4.9%, but this is reflective of how steep the decline in 2020 will actually be.
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Data shows that global advertising spending growth did not fully recover for eight years following the previous recession, so a swift recovery may be highly unlikely, and returning to pre-pandemic growth rates may not be possible for a number of years.

 As for the Bulgarian market, the decline in ad spend is expected to be close to 20%. According to the research by Publicis Groupe Bulgaria, the lowest gross advertising investments in television were in April (BGN 94 million), a 39% drop compared to the same period last year. For the traditionally strong month of May, TV advertising revenues decreased by 26% to BGN 121 million.

"For some seasonal advertisers and industries, including beer, pharmaceutical, cosmetics, loans, cars, etc., this is a gap that is irreversible and not recoverable until the end of the year " Svetlana Tacheva, Research Director at Publicis Groupe Bulgaria, said.

 Sources: WARC, Visual Capitalist, Capital Daily

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