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State of the Screens

GroupM Predicts 13 Percent Decline in 2020 U.S. Ad Spend

By June 25, 2020November 15th, 2021No Comments

Global ad market (YoY growth) according to GroupM:
1) 
2012 – $408.0B
2) 
2013 – $421.7B ( 3%)
3) 2014 – $437.7B ( 4%)
4) 2015 – $458.3B ( 5%)
5) 2016 – $482.9B ( 5%)
6) 2017 – $516.2B ( 7%)
7) 2018 – $552.7B ( 7%)
8) 2019 – $587.0B ( 6%)
9) 2020P – $517.5B (↓ 12%)
10) 2021P – $559.8B ( 8%)
11) 2022P – $586.4B ( 5%)
12) 2023P – $607.6B ( 4%)
13) 2024P – $633.1B ( 4%)

Global GDP vs. global ad spend according to GroupM:

YoY growth for the U.S. ad market:
1) 2009 – ↓ 16%
2) 2020 – ↓ 13%

Quote from Brian Wieser – Global President, Business Intelligence @ GroupM:
“That we ‘only’ expect a 13% decline is surprising.  We might normally expect that because the 2020 economic decline is so much worse than 2009, advertising should be much weaker.”

Flashback: Political Ads Expected to Explode, Even as Economy Tanks

Wow: The political video ad market is growing (CAGR) at a rate of 26%!

Global TV ad market (YoY growth) according to GroupM:
1) 
2012 – $154.3B
2) 
2013 – $158.8B ( 3%)
3) 2014 – $163.1B ( 3%)
4) 2015 – $164.0B ( 1%)
5) 2016 – $166.8B ( 2%)
6) 2017 – $165.2B ( 1%)
7) 2018 – $165.8B ( 0%)
8) 2019 – $164.5B ( 1%)
9) 2020P – $135.5B (↓ 18%)
10) 2021P – $143.5B ( 6%)
11) 2022P – $146.4B ( 2%)
12) 2023P – $149.2B ( 2%)
13) 2024P – $153.0B ( 3%)

Big question #1: How big of an impact is this slowdown having on ad prices?

Scatter ad prices (YoY growth) for big 3 TV networks, according to SQAD:
1) 2019-Q2 – $142K
2) 2020-Apr – $102K (↓ 28%)

Big question #2: Do buyers believe that we have hit bottom yet?

Share of buyers that believe that ad spending has bottomed out according to Pivotal Research Group:
1) April – 51%
2) May – 57%

More #1: The TV Commercial, Once Advertising’s Main Event, Suffers in the Pandemic

More #2: The History Of Advertising In A Recession

Michael Beach

Michael Beach

Michael Beach is the Chief Executive Officer of Cross Screen Media, a media analytics and software company that enables marketers to plan, activate, and measure CTV and linear TV at the local level. Michael is also the founder and editor of State of the Screens, a weekly newsletter focused on video advertising that is a must-read for thought leaders in the advertising industry. He has appeared in such publications as PBS Frontline, The Wall Street Journal, The New York Times, Axios, CNBC and Bloomberg, and on NPR’s Planet Money podcast.

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