Zenith forecasts Aussie ad spend to grow 8% next year, full recovery by 2022

Australia’s estimated ad spend decline will hit 12% for 2020, according to Zenith’s adspend forecasts which also predicts global ad spend to shrink by 7.5% this year.

Locally, the market is expected to take until 2022 for spend to return to 2019 levels, though there is an 8% level of growth anticipated for 2021 compared with this year.

That’s better than global estimates, with 5.6% growth expected by 2021, boosted by the delayed Summer Olympics and the UEFA Euros football tournament.

This will remain below 2019 levels, but by 2022 spend levels are expected to exceed those in 2019.

Zenith Australia head of national investment Elizabeth Baker

The Advertising Expenditure Forecasts report, from Publicis Media solutions hub Zenith, hones in on a speedier than expected recovery from the impact of the global pandemic. In July, Zenith was anticipating a 9.1% global fall in ad spend for 2020.

National head of investment Elizabeth Baker said Zenith Australia is expected to see the market claw back 2020 losses early in the New Year.

“We’re expecting that the New Year will start showing growth across most media, as the market starts to claw back on this year’s losses,” she said.

“However, we don’t expect the 2020 drop to be fully mitigated before 2022 at best. Digital investment will lead the growth, with consumption accelerated throughout this pandemic.”

Key areas of growth over the next two years in Australia will include BVOD, which is expected to make up 10% of all TV network revenue by 2022.

Cinema and out of home, two verticals that were among the hardest hit by COVID-19, could take until 2023 before ad spend returns to pre-pandemic levels, though both will see double-digit growth next year.

JC Decaux ANZ chief commercial officer Max Eburne said low interest rates, low household debt and high disposable income will help drive post-COVID recovery over the next few years.

“It is possible that we could see a boom year in 2021, similar to what we saw after the outcome of the GFC in 2010. There’s a number of metrics that lead us to believe that.

He warned, however, that any further lockdowns could “really spook the advertising market.”

Seven Network sales director Natalie Harvey added that advertisers are feeling positive about the outlook for 2021 and beyond, and also flagged that the shape of the overall ad spend market in Australia will change.

“E-commerce will continue to fire really hard, and we’ll also see some traditional bricks and mortar retailers going very hard as Australians are looking to improve their homes.

“Cinema and outdoor are going to rebound really well considering the base they are coming off as well.”

The report is available to view here.


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