Covid-19's Impact on Advertising Spend Across 3 Critical Regions

We’re eight months into 2020, and it’s safe to say our predictions from last year have been completely derailed. The whole world seemed to pause in mid-March, but now, months after lockdowns first began, most of us have come to terms with the fact that Covid-19 is here to stay through the end of 2020. Instead of “wait and see,” we’re operating under a new normal, and the state of the market varies per region. 

Advertising spend declined across all regions and most industries in Q1, but some regio

ns were hit harder than others, and major markets (especially the United States) are predicted to recover the slowest. With so many data points and so much commentary, keeping track of where we are now can be overwhelming – to help, we’ve compiled current trends and predictions for three critical regions to give you a quick snapshot. 

The United States: A Slow Recovery

Advertising spend typically spikes during election years in the US, but this year the predicted $3 billion political spend is only preventing an even larger decline. According to GroupM’s midyear global ad spend forecast, digital advertising in the US would have grown by double digits, but instead total ad spend will now decline between 4-9%.  

• GroupM: United States Will Recover More Slowly than Other Ad Markets 
• US Ad Market to Decline 4% to 8% in 2020 – With Political Ads, SMBs and Digital Viewing Providing Some Relief 

China: Digital Saves the Day 

China, the original epicenter of this pandemic, appears to be faring the best in terms of advertising spend. Even after Covid-19, its ad market is anticipated to grow by 8.4%. Many have attributed this to China’s digitally-focused consumers (who spend approximately 2/3 of their media time online. Internet provider Tencent announced a 32% increase of digital ad revenues in their first quarter, suggesting that digital will play the strongest role in China’s advertising spend recovery and continued expansion. 

In comparison to other regions, the major impact on China’s advertising market is reduced growth, rather than a decline. Still, eMarketer points out, “Companies in other parts of the world that are dependent on supply chains in China may also start reducing their ad spend to mitigate economic losses.” 

Europe & The United Kingdom: Taking Advantage of Available Supply 

While advertising spend in this region will take a hit overall (around 16.7% for the UK & 9% across Europe), specific categories are taking advantage of low eCPMs and extra inventory. In April, IAB categories including Business, News, Hobbies & Interests and more began increasing their spending, in some cases spending more than they were pre-covid. Francis Turner, CRO and Co-Founder of ADYOULIKE, observed increases in the following scenarios: 

• Business services solutions (especially those supporting the increase in remote work) 

• Hobby & interest advertisers (promoting at-home activities) 
• Government spending (for public service announcements and safety messages) 

Conclusion: Keep Your Eyes Peeled 

If there’s one thing 2020 has taught us, it’s that our future predictions can only be so accurate. Current data suggests future impacts, but what happens between now and then is ultimately unpredictable. Now, perhaps more than ever, it’s important to pay attention and watch the numbers, but also take the commentary with a grain of salt. For more updates, be sure to subscribe – we'll keep sharing the latest from the best sources in our industry.