The global ad economy will contract 7.2% this year -- the worst reduction in worldwide ad spending in recent memory -- according to the latest estimates from IPG Mediabrands Magna unit.
That estimate includes the stimulus from cyclical events that add incremental spending to the global ad economy such as the U.S. elections, but excluding the impact of such events, Magna estimates the global ad economy will contract 7.8% this year, but will rebound 6.4% in 2021.
The new estimates indicate the U.S. ad economy will shrink 4.4% and will rebound 4.0% next year.
Over its past three forecasts, Magna has revised the U.S. ad growth downward by 10 percentage points from a growth of 6.6% in its December 2019 forecast, to minus 2.8% in March, just as the COVID-19 pandemic was beginning to impact the U.S. economy -- and now down to 4.4% this month.
Others have predicted even more dire declines for the U.S. and global ad economy this year, but Magna -- or some variant of IPG's forecasting unit -- has been the gold standard for ad forecasting since the 1940s.
“Beyond the short-term V-shaped recession/recovery impact on the economy and the advertising market, the COVID-19 crisis will have global and long-term effects on society, business models, consumption habits, mobility and media usage," states Vincent LeTang, executive vice president of global market intelligence at Magna, and the author of the forecast report.