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Sharp declines across UK traditional media will cut its total ad spend by 7.5% this year


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The depth and lasting impact of the global recession, along with the sharp economic downturn in the UK, signal a long and challenging road to recovery. This year in the UK, total media ad spending will be £21.03 billion ($26.84 billion), down 7.5% from 2019. This steep decline in expenditures can be attributed to the lack of spending on traditional media.

“Traditional advertising has suffered hugely during the pandemic, due to stay-at-home orders and the cancellation of large sporting events,” said Bill Fisher, eMarketer senior analyst at Insider Intelligence. “Digital, meanwhile, has offered the biggest captive audience and an easy and cost-effective route to consumers. Spend on traditional media will rebound once some semblance of normalcy returns next year, but it’s unlikely to reach pre-pandemic levels.”

After making very significant downward revisions across traditional media channels due to the effects of COVID-19, we expect traditional media ad spending to fall 22.6% in 2020. This estimate is based upon the assumption that the UK will not experience a significant second wave of infections.

As a result of the coronavirus, out-of-home (OOH) advertising was the most negatively affected medium, with growth revised down from our previous forecast by 26.3 percentage points. That was followed closely by radio, revised down by 22.0 percentage points.

Digital ad spending will remain relatively flat this year, growing 0.3% to reach £15.08 billion ($19.25 billion). However, it is the only major medium that will see growth in advertiser spending in 2020, accelerating its share of the total UK ad market. Although digital will gain 5.6 percentage points in market share this year, that trend will pause next year as traditional media bounces back. Digital will account for 71.7% of total ad spend in 2020, and that proportion will reach 75.6% by 2024.

Within digital, video ad spending will be the fastest-growing format this year, at 15.0%. Video will also account for more than half of all digital display ad spending for the first time. While display outlays will rise 7.2%, search spending will decrease by 3.2%. (Nonvideo display will decrease as well.) This year, and the subsequent recovery period, will be tough on sectors that spend heavily on search, such as travel and hospitality.

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Source:: Business Insider

      

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