"Overall, we expect the crisis will only accelerate the secular shift in advertising budgets towards digital, while potentially also leading to more attempts by the EU broadcasters to seek further partnerships and M&A (mergers and acquisitions) to share costs and build scale," according to the company's Europe Media: Broadcasting report, seen by CNBC.
Brands are able to measure the impact of online ads more easily than those on TV, and digital ads tend to be cheaper — and it appears the pandemic has had more of an impact on TV ad revenue than digital. TV ad revenue in Europe was down by about 50% in April, while the results of the major digital players were generally above expectations, Goldman noted. Google search revenue was "down mid-teens," while Facebook's revenue growth for the first three weeks of April was flat and Snap's went up 15% in April, the report added.
A separate report from the World Advertising Research Center (WARC) showed that global marketing budgets for digital advertising in April fell for the first time since WARC started tracking spend in 2012. Advertising in printed newspapers and magazines saw the steepest declines followed by outdoor billboards, radio and TV.
Advertising is typically one of the first things businesses cut back on during recessions and this year's TV Upfronts in the U.S., where broadcast networks woo marketers, have been delayed indefinitely. Many of the companies surveyed in a report by consultancy Advertiser Perceptions said they could replace the reach of traditional TV ads with those in streaming services or via digital video ads.
A lack of demand for media buys has also made ad spots cheaper, according to WARC data. For example, the cost of digital video ads was forecast to go up by 6.7% globally by media audit company ECI Media Management but is only likely to increase by 1.3%, per WARC.
In terms of recovery, ad spend has historically shown a good relationship with economic growth, Goldman noted, with every 1% change to GDP usually translating to ad revenue growth going up two to three times.
However, the post-pandemic recovery is likely to be less significant than the one after the 2008-2009 recession. The global TV ad market grew 14% in 2010 after a 7% decline in 2009 per figures from Magna Global, and Goldman expects European broadcasters to see growth of only 6% after an 18% decline this year.
Broadcasters are also likely to be more open to partnerships and M&A, Goldman noted, with Italian broadcaster Mediaset set to acquire a 25% stake in Germany's ProSieben this year, for example. The report's authors also expect more partnerships in streaming services — in the U.K., ITV and the BBC launched Britbox in November.
Broadcast stocks were the worst-performing sector in the European media market according to Goldman's report, down 41% on average year-to-date. This compares to a 27% decline for companies in the STOXX 600 Media, an index of European stocks.
Goldman expects net annualized returns to decline between 30% and 50% for European broadcasters in the second quarter, with French channels including TF1 and M6 decreasing the most, and German broadcasters RTL and ProSieben being impacted the least.