Global ad spend is set to fall by almost $50 billion this year as businesses in all sectors cancel or postpone media buys.
The ad market will reduce by 8.1%, or $49.6 billion, according to data from the World Advertising Research Center (WARC) published Thursday, compared to a previously forecast growth of 7.1%.
This means that overall global ad spend is forecast to reach $563 billion this year, down from a previously projected $612.6 billion.
Traditional media outlets will be impacted the most, with TV spend reducing by 13.8% and newspaper ad buys going down 19.5%. Cinema ad spend is set to decline steeply, at 31.6%.
Online media will also be affected. After seeing massive ad spend growth in previous years, forecasts have been reduced. Social media advertising was set to grow by 20% this year, but WARC has reduced that forecast to 9.8%, while search advertising is only set to grow by 0.9%, instead of a projected 12.4%.
Ad-supported tech giants such as Facebook and Google parent company Alphabet reported results in late April and anticipated negative impacts of the virus in the second quarter.
WARC predicts that Facebook's ad revenue will reduce by $5.3 billion to $77.6 billion against pre-outbreak forecasts across all of its platforms including Messenger and Instagram, in 2020. Alphabet, meanwhile, is forecast to make $137.1 billion in ad revenue, a reduction of $12.9 billion on pre-pandemic projections.
When it comes to sectors, transport and tourism media budgets are unsurprisingly forecast to fall fastest, followed by leisure and financial services. And even in the food sector, which has seen big rises in online shopping, ad spend is set to fall by 7.7%. Pharma and health care are forecast to see the smallest reduction in ad spend, at 2.1%.
But despite the heavy projected fall in ad spend, the declines are set to be less steep than those seen during the recession of 2008-2009, where the market reduced by 12.7%, or $60.5 billion. This is due in part to U.S. presidential election ad spend boosting the market, with political spend set to go up by 26% over 2016 figures, or almost $5 billion.
In terms of regions, Latin America is set to see the steepest decline in ad spend this year, forecast to be 20.7% down, with Africa and the Middle East following. North America is forecast to see the least impact, at 3.7% down, with Europe expected to see a 12.2% fall.
Brian Wieser, global president of business intelligence at ad group WPP, said there are ways businesses can reinvent themselves despite the crisis. "Every brand should be questioning assumptions about their company's competitive position. What are the ways in which you can reinvent the category? That the economy will be weak is a given, but any one business's outcomes are not," he said in a release issued by WARC.