This ad spend drop won’t be as bad as the last meltdown. Here’s why.

What's New in Publishing 23 Jun 2020 07:20

It could be worse…

That’s what industry analysts are saying about out the expected decline in ad revenue due to the pandemic.

“GroupM, a unit of WPP PLC, expects ad spending in the U.S. to drop to $207.9 billion this year from $238.8 billion in 2019, excluding political-ad outlays,” writes Suzanne Vranica in The Wall Street Journal. As recently as last December, the company was forecasting U.S. ad spending would rise by 4% in this year.

As Vranica points out, advertising is often on the chopping block when budget cuts must be made … even with the growing awareness that brands that advertise during the tough times do better in the good times.

This silver lining to the forecast is the upcoming presidential election; Vranica says GroupM is predicting this will limit the overall drop to 8%. And while the pain is expected to hit across channels, TV ads are more vulnerable this time around than usual, as is print.

“Advertisers and TV networks were supposed to begin negotiating deals for the coming fall TV season this month, but large companies including Procter & Gamble Co., Bank of America Corp., and Unilever PLC are pushing for a delay,” Vranica explains. “Brands have a lack of visibility into what they would be buying since TV production has been closed and there are still questions surrounding when sports will return.”

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