The beginning of the new decade has gotten off to a bit of a rough start with the coronavirus scare which will have an unpredictable impact on the global economy. Hyundai has stopped production as supply chains get interrupted. Apple has closed all of its stores in China. Look at the pictures from Wuhan and it’s easy to see the immediate effects of having no one on the streets or in stores.
Before the coronavirus got out of hand though, and if it is contained before it spreads too far across China and the globe, predictions overall for the global economy in 2020 were rather positive. While some major European nations like Germany and Spain face stagnating growth, and the UK is looking at a recession as the country and trading partners figure out Brexit, markets like the US were slated to grow by 2% in terms of GDP over the course of the year.
The ad market is usually a direct reflection of the economy, when consumer buying is strong so are the ad budgets. When demand sinks so do marketing initiatives.
It’s no surprise then but still a positive note that global ad spending in 2020 is slated to rise 3% (all channels included). Despite the challenges in the beginning of the year, major events provide the platform for major campaigns, including the Tokyo Olympic Games, the UEFA Soccer Championship, and of course, the American Presidential election.
The Super Bowl managed to maintain its role as cultural bellwether. The major brands either were there with feel-good messaging or took a position to not advertise (like Stella Artois) for various reasons (but they all had reasons for the PR). J-Lo and Shakira shook (and tongue-flicked) themselves into Internet infamy.
Put your money in digital
The Super Bowl shows that there is still quite nothing like live TV. Though TV advertising has been declining over the past years, it still occupies a coveted position of attention grabbing reach.
That coveted spot is up for grabs. In certain areas like Latin America digital ad spending has already surpassed TV in terms of share of investment. The catch up capabilities of TV and the rise of streaming services means that prime time is being cut up on an individual basis. No wonder then that non-linear TV sponsorships are rising.
The one stat to take away here is that digital ad spending will rise by over 10% in 2020. Driving that increase – and the big winner in 2020 – is online video, slated to jump 14%. As a digital marketer that’s very good news for job security, but also for potential. Bigger budgets mean better content, orchestration, and impact.
When digital becomes the primary communications medium it means that content is no longer simply adapted to digital formats, it is custom made for it. This is becoming more important than ever as vertical formats like Instagram stories take the lead and are completely incompatible with landscape TV formats. Digital is also about how the pieces of content fit together to create a customer experience. More budget means more waves and more scenarios which should lead to deeper insights. And finally, custom content laid into comprehensive digital media plans and deeper insights will lead to more impactful campaigns. We may finally reach a point where digital-only campaigns could achieve the same sorts of results as plurimedia campaigns in terms of sales and brand lift.
Too early to tell, but keep your chin up
Shit could still go horribly wrong. Another major scandal at Facebook could cause companies to pull the plug on ad budgets less they appear to support a monster. Coronavirus could shut down global trade and kill masses of people and in which case digital ad spending will be the least of our problems. But the trends of increased use of digital devices, the roll out of 5G, and the fact that quarantined people can still use their phones means that the growth in digital ad spending should continue comfortably not just for 2020 but for the years to come.
*All stats from my various agency and partner sources