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“Robust growth to resume in 2021”: Global digital ad spending to bounce back, reports eMarketer

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Just yesterday we reported the findings of Gartner’s Annual CMO Spend Survey Research 2020 where 73% of CMOs dismissed economic pessimism, expressing confidence that COVID-19’s negative impacts will be short-lived.

Despite a dramatic deceleration caused by the coronavirus pandemic driving down ad spend globally, there are now significant signs of recovery.

V-shaped economic curve

The majority of CMOs believe the post-COVID-19 economic curve will be V-shaped, with a staggering 95% consensus on a positive outcome, either expecting a return to business-as-usual in the next 18 to 24 months, or a significant positive impact going forward.

eMarketer’s Global Digital Ad Spending Update Q2 2020, released this week, also paints a similar picture. While worldwide digital ad spending will achieve a modest 2.4% growth this year, it’s expected to bounce back with a growth of 17% in 2021.

Decline of the duopoly

While a quick V-shaped recovery in digital ad spending is good news for publishers, the Google-Facebook duopoly is expected to bear significant losses in ad revenues, with Google declining for the first time. 

“Google will suffer a 3.3% loss in ad revenues this year, driven in part by a huge decline in travel-related search queries,” says eMarketer forecasting writer Ethan Cramer-Flood.

“Facebook will muddle through with 5.9% growth on the strength of its display business. This is still a significant downturn compared with Facebook’s 26.6% growth in ad revenues in 2019.”

Rise in the major markets

A country-wise breakdown of eMarketer data also predicts a bounceback in the major markets. 

For example, while there will just be a 1.7% increase in US digital ad investment this year, it’s predicted to shoot up in 2021, and maintain that momentum going forward.

US digital ad spending will inch up by less than 2% this year because of the economic dislocation caused by the coronavirus pandemic, though we expect robust growth to resume in 2021.

Nicole Perrin, eMarketer Principal Analyst

China’s total ad spending will remain in positive territory in 2020. Digital ad spending is estimated to rise by 5.0%, to $75.33 billion.

According to eMarketer, “its $75.33 billion total will still easily rank China as the second-largest market worldwide for digital advertising. Overall ad spend will total $105.25 billion.”

China’s total ad spending on digital and traditional advertising will exceed Western Europe’s combined spending for the first time ever this year. By 2024, China will shoot past the $150 billion mark, far exceeding Western Europe’s combined total at that point ($127.90 billion).

Ethan Cramer-Flood, eMarketer Forecasting Writer

In China, mobile ad spending will outperform all other categories this year, at 13.0% growth. Mobile will represent 63.6% of all ad dollars spent, and an overwhelming 88.9% of digital ads.

In the UK ad market, eMarketer predicts “digital ad spending will see marginal growth, fueled by the resilient performance of digital display, particularly video.”

Digital video spend will see a dip in its growth rate this year, but there will still be growth—of 15.0% in fact—a remarkable feat against a backdrop of declines in ad spend across most formats.

Bill Fisher, eMarketer Senior Analyst

Mobile and video are also holding strong in Canada. 

“Spending on mobile ad formats will grow 8.0% this year—much of the growth displaces spending in desktop digital—accounting for 44.9% of total media ad spending,” says eMarketer senior analyst Paul Briggs.

“Video display’s growth is also strong, increasing 3.6% in 2020 as social media ad units drive growth in the format.”

Even Latin America, no stranger to turbulent market activity, is seeing a growth in digital advertising.

“We expect that digital ad spending in Latin America will grow 5.0% to $9.33 billion,” says eMarketer research analyst Matteo Ceurvels.

“Digital platforms will claim 39.1% of all media spending, fueled by an uptick in digital ad dollars from advertisers in the region’s two largest ad markets, Brazil and Mexico.”

In fact, the region will be home to the world’s three fastest-growing digital ad markets this year: Colombia (11.2%), Chile (5.9%) and Brazil (5.2%).

Although right now ad spends are down globally, these are strong indicators of an impending bounceback. And we find hope in the words of eMarketer’s Principal Analyst Nicole Perrin:

We expect robust growth to resume in 2021.

The research is available from eMarketer here:
Global Digital Ad Spending Update Q2 2020