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March 18, 2020

Forecast: virus Could Strip $3B in Ad Spend from U.S.--But Some Media Will Gain

NY Post: The coronavirus pandemic could slash as much as $3B from advertising and marketing budgets in 2020, according to a new report. “This is a global human disaster that impacts every company,” said Jack Myers, who has been tracking the ad spend market since the 1980s. On Monday, Myers released a new forecast on the ad spending impact of the COVID-19 outbreak — tripling his previous forecast of a $1B blow. Given how quickly the virus has been spreading, a decline of $3B is more likely, he said. “What I saw a week ago as the worst-case scenario, I now see as the most likely scenario,” Myers told Media Ink. Before the coronavirus forced retailers, restaurants and entertainment venues to close their doors, Myers was predicting $227B would be spent on advertising and marketing in the U.S. this year— a 6.2% increase vs. 2019. The $3B decline — to $224B— represents a 1% drop from the earlier forecast, meaning ad and marketing spending could still be up 4.8% vs. a year ago. Because even as legacy media see advertising grow 1% YoY, social media platforms Facebook and Snap could see a 12% surge to $30.8B. And as the coronavirus forces people to spend more time at home, streaming video platforms like Hulu, Pluto, Roku and Direct TV could see ad spending grow 42%, to $2.6B — up from his pre-coronavirus forecast for growth of 38%. Broadcast TV may actually see a rise in ad spend due to increased demand for political ads leading up to the November presidential election — and the Olympics. Myers sees network TV ad sales up by 4%, or $100M. Of course, the Summer Olympics could also be canceled, Myers acknowledged, and sporting events have been put on hold. Cable could see a decline in ad spend if it’s forced to halt production of popular dramas and resort to reruns. Myers was forecasting a 3.3% drop for cable before the coronavirus hit, but now predicts a 6% decline--down nearly $800M to $27B. Myers sees a 3% decline for digital news site advertising, but says the coronavirus may actually help newspaper ad spending, which he now predicts will be flat."

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