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March 2, 2020

GroupM: Canada's Ad Growth Decelerating; Global Ad Scenario Hinges on Coronavirus


MediaPost: "The expansion of Canada’s ad economy has begun a deceleration that will last through 2022, according to just-released estimates from GroupM’s Business Intelligence unit. “Canada’s advertising forecast aligns with global trend of deceleration,” GroupM Business Intelligence Global President Brian Wieser writes in the report, noting that the major media (internet, TV, magazines, newspapers, radio and outdoor) will expand about 3.9% this year, down 1.1 percentage points from 2019.Wieser cautioned that the impact of the Coronavirus is a “significant wildcard with potential to impact consumption of finished goods and supply chains around the world,” but that GroupM’s current expectations “presume relatively stable macro-economic conditions looking toward the rest of the year." Long term, Wieser projected Canada’s advertising economy will expand to $19B in 2024, making it the ninth largest advertising market in the world." Separately, MediaPost reports that Weiser's 1,527 alert on the overall global ad scenario "uses the word "may" 13 times and the word "uncertainties" three times to explain how the virus could impact various aspects of the ad business, including both consequences and opportunities, as well as mega events like the Tokyo Summer Olympic Games... "Marketers often cut spending because of uncertainties around consumers buying products... if those products could even be made available," he writes. "Ecommerce-based delivery was often challenged because of limited availability of drivers and supply chain issues that impacted all forms of manufacturing and retail sales.As concerns about the impact of a global pandemic have grown, industry speculation has been raised about everything from the ad industry's upcoming annual Mecca in Cannes, France, to the potential of network TV upfront cancellation options... If the volume of available budgets for spending on advertising weakens in any given country, it is difficult to anticipate which specific media will be most impacted, Wieser writes. ""It does seem safe to say that.. supply chain issues with China – and the timing with which Chinese manufacturing returns back to normal – will disproportionately impact global media owners whose ad revenues depend on Chinese manufacturers," he continues, adding that certain media could actually benefit from lifestyle changes associated with a public health concern, especially TV. "Traditional television could fare relatively better because of the likely improvements in audience levels, while outdoor advertising may be worse off with lower levels of foot traffic in many places," he writes, adding, "At the same, time we emphasize that spending on paid media will not necessarily correlate with spending by marketers on services, such as those provided by agencies.""

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