As the U.S. gears up for the 2020 presidential election, political advertising is expected to become a big contributor to total advertising spend by the time election year arrives—not only domestically but globally—according to WPP’s GroupM’s Worldwide Media Forecast, “This Year, Next Year.”
The report predicts underlying growth of the global industry (excluding U.S. political advertising) to hit 4.6 percent in 2019 and 4.7 percent in 2020. But when U.S. political advertising is factored into the global totals, although 2019 growth falls to 3.4 percent, in 2020 the total global spend is expected to grow by 6.0%.
“It takes a lot to surprise me when studying this stuff,” Brian Wieser, GroupM’s global president of business intelligence, told Ad Age. “I have to say going through fourth-quarter numbers, I didn’t appreciate how much political advertising is affecting beyond TV.”
Wieser, the former high-profile Pivotal Research Group analyst who joined GroupM in February, said political advertising touches every form of media from digital to direct mail.
“So much money is flowing from political [advertising] and not just from campaigns but the candidates themselves,” he added.
Alongside the U.S., which is expected to grow by 5.8 percent in 2019 and 4.8 percent in 2020, the report said significant contributors to global growth are China, India, the U.K. and Brazil, collectively accounting for “well over” half of the 2019 and 2020 spend.
Breaking that down, the report estimates China will grow by 5.6 percent in 2020. India is expected to hit double-digit growth of 14 percent and 13 percent in 2019 and 2020, respectively, surpassing Australia and Canada as the world’s eighth largest ad market. Despite uncertainties around Brexit, the U.K. is expected to increase more than 6.1 percent this year and 4.6 percent in 2020, according to the report.
The report also predicts that digital media will make up 50 percent of the world’s total ad spend by 2020, which is double its 25 percent share from 2014.
Still, Wieser expects digital media’s share to “eventually plateau.”
“It’s inevitable,” he explained, “the law of gravity. If digital advertising were to continue growing at the same pace, it would be 100 percent of all of advertising. That’s not realistic. It’s not as if television is going to evaporate.”
Television’s growth meanwhile has flattened. Globally, the report expects television to slide 3 percent in 2019 before rising by a tepid 1.5 percent in 2020, stemming primarily, again, from U.S. political advertising efforts.
Newspapers are still in a state of peril
The report projects newspapers’ share to fall 9.3 percent and 5.8 percent in 2019 and 2020, respectively. Newspapers are estimated to represent a mere 6 percent of the world’s total advertising spend, down from 34 percent 20 years ago, and will generate only $38 billion in revenue by 2020, according to the report.
Earlier on Wednesday, WPP held its annual general meeting where the holding company maintained its 2019 guidance of a like-for-like revenue decline of 1.5 to 2 percent related to pressure in the first half of the year from client losses in the latter …read more
Via:: Ad Age B to B