How Coronavirus Affected 20 Years Of Ad Spend [Infographic]

Kevin Mullins

Like passengers on the deck of the Titanic, no one living in 2019 could have predicted the toll of the Coronavirus on the global economy in 2020.

As digital marketers, it felt like we were heading into the roaring 2020s. Flapper dresses, gilded everything, and plenty of hooch. Yes, it seemed like the good times were here again. Then COVID-19 landed and infected everything.

Back in April, when the lockdowns first hit, we shared how COVID-19 was radically changing consumer behavior. I guess being stuck at home with a credit card and high-speed internet made us go a little crazy.

So far this year, we’ve bought more products on Amazon and other marketplaces than ever before. We’re searching more on Google, sharing on social media, and relying on video to stay connected to friends and family. 

The telecommunications industry must be wringing their sweaty hands with glee.

Like everyone else, we did not realize how bad things could get. Only now, nearly 10 months later amid a second wave, are we beginning to grasp the enormity of what has happened to our world.

Visualizing Advertising’s Major Upheaval

Back in January, analysts at the World Advertising Research Center estimated that global advertising investment would grow at a 7.1% clip in 2020.

They expected total marketing dollars across the world’s biggest advertising spenders to increase. Forecasts like the one below from Lek in 2015 presented a consistent year-on-year increase in ad spending.

Everything looked great!

Screen Shot 2020 11 10 at 12.18.31
Predictions from Lek.com in September 2015

Today, survey data and consumer trends show we’re entering the deepest global recession since the Great Depression. This despite record spending (over $14 Billion according to the New York Times) during the 2020 presidential campaigns.

visual capitalist infographic ad spend coronavirus
Courtesy of Visual Capitalist

Even though 2020 advertising spend is forecasted to cliff-dive by almost 13%, this figure excludes political advertising. Without political spending, the decline becomes a slightly-more-manageable 7.6%.

No matter how you slice it, coronavirus has kneecapped the upward trend of 20 years of ad spending in the U.S. Levels that may take years to recover.

For the rest of 2020 and through 2021, analysts forecast a brutal contraction of nearly 8.2% in media spending. A decline of nearly $50 billion due to the pandemic’s effect on consumer behavior.

James McDonald, Head of Data Content at WARC warns,

“[we]…believe that the value of global advertising trade will decline by 8.1% – or $49.6bn – this year, to a total of $562.9bn. This compares to our pre-outbreak forecast of 7.1% growth made in late January, equating to an absolute downgrade of $96.4bn.”

James McDonald, Head of Data Content at WARC

Winners and Losers

Lot’s of money evaporated this year. But, for some, the writing was already on the wall. The traditional advertising industry was already dropping. COVID-19 just made things worse.

Visual Capitalist confirms,

“Spend across every type of traditional media format will see a decline in 2020, while most online media formats are expected to see an increase in spending.”

Visual Capitalist
VC ad2019 2020

As we wrote herehere, and here, traditional sales and marketing strategies, including traditional media, are being radically transformed by changing trends in consumer behavior.

Have been for a long time.

Think about it…

With people stuck indoors, traditional media formats such as out-of-home advertising have less effect. Fewer eyeballs on billboards and outdoor advertising means more eyeballs on mobile phones, apps, and websites.

Inbound Marketing To The Rescue

So what’s replacing traditional advertising? Online media. Digital marketing activities like content marketing, and inbound marketing strategies are growing exponentially because they match post-COVID-19 customers’ shopping habits.

These digital marketing strategies are also easier to measure, track, and report ROI.

For businesses looking for more bang for their marketing buck, digital marketing can be wildly more effective in driving audience engagement and tracking real ROI.

Screen Shot 2020 11 10 at 12.37.13
100% Growth In Organic Sessions in 2020

Think about your own habits. Have you changed how you shop online? We predict that companies who shift their marketing spend away from traditional activities like trade shows and events to inbound marketing will continue to see significant growth.

We’re already seeing it.

We have customers that went from zero online leads in 2019, to four or five sales qualified leads a month through their website! As the graphic above shows, we’re using content marketing to deliver extraordinary engagement for our customers online.

Bottom line: inbound marketing works.

What are you going to do?

COVID-19 sliced the percentage of spend in advertising for many industries. The question is, is this a temporary trend or a structural shift? We think it’s the latter. We’re helping our clients adjust accordingly. We advise you to do the same.

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