Ad Spend (Total Market): All five Anglo markets reported percent double-digit declines in ad spend when the first six months of 2020 is compared to the previous year. In the U.S., the year-over-year ad spend declined by 16.3%, the lowest of the five markets. The ad marketplace in New Zealand dropped by 18.3% and the U.K. was off by 19.3%. Ad spend suffered the biggest losses in Canada which was down by 28.4%, more than any of the five markets, while Australia declined by 24.0%.
Ad Spend (Television): One reason for the declining ad marketplace was television. Once again, in all five markets, SMI found the year-over-year decline was in percent double-digits. The advertising losses in television were felt greater in Canada which was down by 26.8%, followed by Australia which dropped by 22.6%. While still significant, the losses in television ad spend were lower in New Zealand (-15.9%), the U.K. (-17.7%) and the U.S. (-18.7%).
While the U.S. had such popular sporting events as basketball and baseball delayed. There were also postponements (or cancellations) of popular sports in the other Anglo markets. The National Hockey League season had been put on hold from mid-March until August 1, impacting the Canadian ad marketplace. In the U.K., soccer's English Premier League was suspended for three months before resuming in June. Such popular team sports in the U.K., Australia and New Zealand as cricket and rugby also had their matches disrupted by the pandemic at a notable financial loss. These postponements or cancellations of many other popular sporting events impacted the television ad spend across all five markets significantly.
Ad Spend (Digital): In all five markets, the decline in digital advertising was lower than the drop in television ad spend. The ad spend loss was the lowest in the U.S., where SMI reports the year-over-year decline was "only" 9.7%. Once again, the ad spend decline was greatest in Canada where digital media dropped by 22.4%. The decline in the three other markets were all somewhat similar, Australia was off by 15.1%, New Zealand was down by 15.4% and the U.K., declined by 16.1%.
Ad Spend (Other Media): The ad spend decline for other media types (i.e., radio, print, out-of-home, etc.), was greater than either television or digital. SMI found the decline was lowest in New Zealand which had a year-over-year falloff of 23.8%, followed by the U.K. at -27.9%. In the U.S., the ad spend for other media types fell by 31.7% while Australia decreased by 34.7%. Meanwhile, Canada's ad spend for other media was nearly cut in half at -48%.
Product Categories: Needless to say, a large majority of product categories cut back the ad spend across all five Anglo markets. Many of these product categories were impacted by consumers under stay-at-home orders. No surprise that the ad spend for travel services was the hardest hit. Over the first six months of 2020, the product category had the biggest year-over-year falloff in ad spend in three markets, New Zealand (-65%), Canada (-59%) and the U.S. (-53%). Travel ranked second in Australia with a drop-off of 51% and third in the U.K. with a decline of 46%.
In Australia, the falloff in associations/political was the highest of any product category with a year-over-year decline of -82%. In May 2019, Australia had held a federal election to elect members of Parliament. In the U.K., the ad spend for gambling was down by 57%, the most of any product category. Members of Parliament in the U.K., had asked the betting and gambling companies to cease advertising their products on radio and television during the pandemic and many complied.
The decline in ad spend in other product categories varied by market as many of them were impacted by the stay-at-home orders and the economic slowdown. There were a few common product categories that cutback their ad spend in multiple Anglo markets. For example, entertainment or movies/cinema ranked in all five markets, automotive ranked in four markets (U.K., the exception) and retail ranked in three markets (New Zealand and Australia the exceptions).
There were a few bright spots in product category ad spending. In the U.S., pharmaceutical ad spend increased by 8.3%. In the U.K., technology ad spend was up by 10%. In Australia the ad spend for domestic banks was up 7% and in-home entertainment grew by 6.5%. New Zealand saw government ad spend increase by 34%, as several government departments bought ads from media providers to offset the loss in ad revenue from the pandemic. Also, in New Zealand, the ad spend for household supplies was up by 28%. Canada was the only market in which no product category had increased their year-over-year ad spend for the first half of 2020 (CPG led at -10%).
U.S. Ad Marketplace For 2020: Looking ahead, SMI forecasts positive ad growth in third quarter with close to or even above pre pandemic ad spending levels expected by fourth quarter. In calendar year 2020, SMI projects the national TV ad spend will have a year-over-year decline of 9.1%, with the total market ad spend dropping by 7.8%. SMI expects a quicker recovery in the U.S. ad marketplace because of the strength of digital media. This is due in part to the expectation there will be a more permanent shift in ad spend from other media types into digital, which also happened in the aftermath of the 2008 recession.
We look forward to seeing how the next 6 months plays out hope the return of live sports, more original programming and pent up consumer demand will ensure the back half of 2020 is far better than what we have experienced in the past four months.
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The opinions expressed here are the author's views and do not necessarily represent the views of MediaVillage.com/MyersBizNet.