Global Chaos Will Affect Ad Spend

The world is a mess right now.

It’s an election year in the U.S. — possibly the most unique one in history, since the current President has been impeached while still running for re-election.  

If that wasn’t enough, Brexit is now fully in effect, which essentially serves to destabilize one of the more important economic unions in the world.  

Oh, and there’s also a crazy contagious virus sweeping the single most populated country on the planet and it is starting to spread globally because of the interwoven machinations of the global economy.  

And if that wasn’t enough, there’s no more “Game of Thrones” to look forward to.

Election years are typically strong for advertising and marketing.  Political parties spend millions on election campaigns, and this year is no different.  Just the spending by Trump and Bloomberg alone will be enough to set records, but don’t forget about PACs and other groups.  



With all the various uncertainties in the world, and with such a heavily divided populace, plus the fact that this year will be such a high spend, I predict 2021 will be a down year for advertising spend.  Fewer dollars will go towards messaging consumers because either a Democrat will take office (which creates uncertain economic conditions historically) or Trump will win re-election — which could be fine for the stock market, but I still predict advertisers will pull back for fear of continued instability.  In either situation, I don’t see 2021 matching the level of spend as 2020.

While Brexit may have officially happened, it appears to be status quo operationally until the end of the year for the U.K.  That simply means they are punting the issue, but businesses are already wary of London and are getting out of there.

Brexit will likely have a negative effect on advertising both in the U.K. and for U.K. companies abroad.  Their spending may not be what bolsters the global ad market, but it does bolster the European markets — and if they drop spending, other countries may as well.

That leaves China.  China is more isolated in terms of advertising, but it has a bottom-line impact on so many consumer businesses that if the coronavirus continues to scale, it could mean fewer products are being created in China — which leads to less inventory, which leads to fewer sales — and therefore smaller ad budgets.  China is a global player in production and that can have a negative impact on advertising.

I am an optimist by nature.  I look for the bright side of things.  While the predictions above may not be that positive, it’s possible this retrenchment will allow us to rethink how we examine advertising measurement.  

We had gotten to a pretty good place the last couple of years with marketers understanding how to calculate the ROI of digital.  Media mix modeling has progressed to a point where it can be pretty dependable for forecasting and predicting what your media dollars will deliver.  

If there is a pullback, it allows marketers the chance to further dive into measurement, attribution and allocation of dollars to better understand how the dollars they spend are delivering results.  In a downturn, one tends to look for impact on a more granular level, and this could deliver that same kind of mindset.

So, keep an eye on your dollars this year and start the process of examining results more closely now so you are ahead of the game for next year. Doing so will be in your best interest.

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