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Traditional Media Ad Sales Seen Falling 12% in 2020 Due to Coronavirus

TV Ad Sales Upfronts
always with honor for Variety

Ad revenue for traditional “linear” media could fall as much as 12% in 2020 due to the coronavirus pandemic, while digital media advertising could still rise more than 4%, according to a new forecast from Interpublic Group’s media-research unit Magna.

The Magna forecast, a long-watched barometer of media spending, has been revised downward. Overall media sales could  decrease by 2.8% this year , with political spending related to the 2020 election mitigating some of the cuts across various ad categories, including travel, restaurants and personal services, according to Vincent Letang, Magna’s executive vice president of global research.

The pandemic is “a combination of the Great Recession and 9/11,” Letang says in an interview, making reference to big cuts in ad spend spurred by both of those seismic events.

Manga is now calling for ad spend on traditional media to fall 11.7% in 2020, compared to a previous forecast of being flat for the year. And the agency now projects ad spend on digital media will rise 3.9%, rather than the 11.4% previously expected for the year.

National and local TV, radio, print and out of home media are now seen experiencing double-digit declines in ad spending, according to the forecast, though political spending will offset some of the plunge at local TV stations. Search, social and video will see gains of 4.5%, 8.7% and 8.3%, respectively.

One of the factors in the downgrade is the postponement of the 2020 Tokyo Olympics, which Letang suggests could pull some spending forward into 2021. “It makes 2020 a little worse for national TV, but it makes 2021 a little bit better, and it makes us consider that we will see some growth next year,” he says. “We think some of the spending will stay in 2020 but a lot of it will go to 2021 to follow the event, and that will help the recovery.”

Magna is being “cautiously optimistic,” says Letang, and projecting some better times ahead. The agency predicts overall media spend will now rise 2.5% in 2021, compared with a previous estimate of 1.4%.