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April 2, 2020

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Advertising heading for major slump

By Ding Yining | 00:00 UTC+8 April 2, 2020 | Print Edition

Media agencies are revising their forecasts as advertising undergoes shifts expected to outlast the coronavirus pandemic, and changing media habits.

Global digital advertising is likely to slow to single-digit growth this year, from over 20 percent annually in recent years, but will remain the least-impacted, according to a new report from IPG Mediabrands.

The world’s largest advertising holding group, WPP, said like-for-like revenue in China slumped 23 percent in the first two months, and group like-for-like revenue excluding China went up 1.8 percent.

It also warned of a weak March performance, reflecting the worldwide spread of the virus and government actions, but didn’t offer guidance due to significant uncertainty.

China’s CTR Research said ad spending in January based on rating cards fell 5.6 percent, with food and beverage, medicine and alcoholic drink makers among the biggest advertisers.

IPG Mediabrands’ media investment and intelligence unit Magna estimates digital media ad revenues will be the least impacted, thanks to the explosion of e-commerce.

But small local businesses, heavy users of search and social ad formats, are likely to pause or cut digital ad spending.

“Deep changes in attitudes, social norms, consumption, and media viewing habits are likely to outlast the outbreak and change our society forever,” said Vincent Letang, executive vice president of global market research at Magna.

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