Home Entertainment Cinema and out-of-home advertising to suffer most globally because of Covid 19

Cinema and out-of-home advertising to suffer most globally because of Covid 19

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By B B Nagpal

Advertising in the Asia Pacific region is forecast to shrink by 8% this year thanks to the success of some markets in keeping the virus under control, even as global advertising expenditures will shrink 9.1% in 2020 to $572 billion.

According to Zenith Media’s latest spending forecast, digital advertising will account for 51% of global ad spend this year, an upgrade compared to the 49.5% it forecast in December. Digital ad budgets were cut quickly early in the crisis. But as time progressed, brands allocated more budget into digital channels to take advantage of their flexibility and ability to optimize performance, particularly important qualities in an uncertain time, according to the Zenith report.

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According to the World Association of Newspapers global advertising is expected to grow 5.8% to reach $606 billion in 2021 and $636 billion for 2022.

Out-of-home (OOH) and cinema, not surprisingly, have suffered the most from government restrictions on movement, shutters-down in theatres and consumers’ avoidance of public places. Out-of-home advertising is forecast to shrink by 25% in 2020 and cinema by 51%. Looking forward, Zenith forecasts 16% growth for OOH and 65% growth for cinema, but neither will return to 2019 peaks by 2022.

The United States is proving to be relatively resilient this year, benefiting from record political spending in the run-up to the political elections in November.  US ad spend is expected to decline by just 7% this year to $224.5 billion before climbing to $242.8 billion in 2021.

Advertisers in Western Europe cut spend aggressively in Q2, and ad spend will shrink by 15% this year, while Central and Eastern Europe will decline 8%, Latin America by 13% and MENA by 20%.

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Now, digital ad spending will shrink by just 2% in 2020 and Zenith does not expect any of this share to return to traditional media as the crisis eases: digital advertising’s market share is forecast to reach 54.6% in 2022.

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“Paid search has been losing share of the digital ad market over the last few years as video and social channels have gained prominence,” explains Jonathan Barnard, head of forecasting and director of global intelligence for Zenith. “But this year search has come to the forefront as a way of connecting with consumers who have new needs, and also have to find new ways of satisfying their old needs in these difficult times.

Zenith forecasts search will grow over the next couple of years as the environment continues to change, with 5% growth in paid search advertising this year, followed by 13% in 2021 and 10% in 2022.

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The recovery of traditional media, by comparison, will be patchy and “under powered,” reports Zenith. Among traditional media, television and radio suffered the least, expected to end the year with 11% and 12% respective declines. Recovery for television and radio will be minimal, with 2% and 1% growth expected for 2021 respectively.

 The crisis exacerbated the long-term decline of print advertising as newspaper ad spend is forecast to shrink by 21% globally this year and magazine ad spend drops 20%. Zenith states that newspaper and magazine advertising in the report includes only the publishers’ advertising revenues from printed publications; their revenues from digital publications are included in digital advertising. No recovery is forecast for newspapers or magazines, with ad spend in both continuing to decrease next year.


Nagpal_2BB Nagpal is a reputed Journalist, Visiting Professor (Media, PR and Cinema Studies), Film Critic for the past 51 years. He retired as Chief of Bureau of United News of India (UNI) after more than 36 years of service in November 2005 and was founder Chief Editor of the Lok Sabha TV channel

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