The deeper and deeper we get into the economic and societal impacts of the Covid-19 pandemic, the more clear it is that the advertising industry, and the many different types of companies that advertise, are being hit hard.

Zenith, a respected media planning firm, released a new report today regarding the future of advertising expenditures worldwide. They project that total global advertising expenditures will decline just over 9% for all of 2020. In the U.S. they see the 2020 decline as being down 7%. In comparison they reported that the U.S. “great recession” impact on U.S. advertising was a negative 9.5% in 2009.

Zenith is forecasting a 5.8% gain in global advertising spend in 2021 partly because of the Summer Olympics in Tokyo which have been moved to 2021.

Earlier in the pandemic I wrote about the future for advertising expenditures, including coverage of a study of U.S. advertising executives. As I quoted Rob Norman, long-time digital advertising executive, using a long-standing sailors’ analogy, “It’s an ill wind that blows no one any good.”

Digital advertising continues to be a somewhat, though dim, bright spot, in the advertising eco-system currently. The growth of digital advertising is being affected by the pandemic, but overall digital advertising continues its march forward. Zenith said in their release of the report “that digital advertising will account for 51.0% of global ad spend this year.”

This is the first time that digital ad spend has been a majority of total ad spend worldwide. And it is going to continue to grow. “The coronavirus forced brands to embrace digital advertising even faster than expected and made digital transformation of businesses more urgent than ever,” said Jonathan Barnard, Zenith’s head of forecasting.

Zenith pointed out that the traditional media outlets like TV and radio have suffered less than other traditional advertising platforms like print and magazine advertising, both of which are predicted to be down 20% or more this year.

“In past downturns, ad revenue is quick to fall and slow to recover relative to GDP. And since in this case, the economy follows the uncertain trajectory of the pandemic, no one has good visibility into the timing and depth of this recession. What is clear from the past is that brands that maintain or increase their share of voice during the tough times earn lasting market share gains in the recovery – gains that often persist for 5 years or more beyond the crisis,” said Scott McDonald, President and CEO of the Advertising Research Foundation based in New York, and a well-known research expert who has worked at a number of prominent media companies over the years.

Another well-known advertising expert and long-time advertising technology executive, Dave Morgan, CEO of Simulmedia, looked into his crystal ball and saw a continued decline in traditional U.S. television advertising in the years ahead, with growth coming from the Connected TV space, “I think that U.S. TV ad spend this year will be down in the 15% range from last year. I think that 2021 will be down just slightly to 2019, and then decline 5% per year over the subsequent couple of years. Advanced TV ad spend – data driven linear, addressable and CTV – will grow 30% this year and 30-50% per year after that for the next five years,” Morgan concluded.

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Podcasts have been another source of fun, information, and something to do during our extensive time at home due to the Covid-19 pandemic. Recent data from a national online survey I conducted in June reported that 20% of American adults were listening to podcasts at least once a week or more, including those who listened every day (7%).

The Interactive Advertising Bureau (IAB), the leading organization for promoting digital advertising, and Price Waterhouse Coopers (PwC), the international consulting firm, recently released their annual study, U.S. Podcast Advertising Revenue Study, for 2020. The study predicts that podcast advertising revenue will increase by almost 15%, “nearing $1 billion in 2020,” according to the IAB and PwC.

In many cases advertising has been hard hit by the economic impacts of the pandemic and stay-at-home orders. For many industries—such as travel, hospitality, retail and others—the result of the current economic upheaval has been huge. The recent study on podcast advertising revenue documents an example of where advertising has been more robust. In general, digital advertising is being less negatively impacted than other forms of advertising during the pandemic.

The same partners in this study issued a similar study in 2019 and past years. In 2019 they estimated that podcast-related advertising revenue was $708 million and that in 2018 it was $479 million. The rates of increase are coming down as the total advertising revenue scales up. Nonetheless, it is clear that podcasts have become an important platform for advertising.

It is often said in the media world that advertising revenue follows eyeballs. In this case it is more that the advertising dollars are following the ears of consumers.

Some of the advertising categories that were strong on podcasting, according to the PwC and IAB report, include consumer brands, financial services, health, wellness, and home appliances. The top type of content on podcasts was news at 22%, comedy at 17%, and society/culture at 13%. It is interesting to note the breadth of podcast content on the top grossing podcasts, such as sports content and commentary from The Joe Rogan Experience or the Bill Simmons Podcast, to true crime podcasts like My Favorite Murder.

There are also other revenue streams growing in the podcasting world, including content licensing and consumer payments. Hernan Lopez, founder and CEO of Wondery, a major podcast company, said looking at the future, “Podcast ad revenues will grow faster than pretty much any other form of media in 2020; and ad revenue is only part of the story. For Wondery, licensing and consumer revenue will represent well over 20% of the total this year.”

In fact, 72% of podcast consumers over the age of 55+ believe in the mixed-business model of paid podcasts and free podcasts supported by advertising. Only 56% of podcast consumers in the 18-to-34 range believed in the mixed model, and 34% of the younger age group felt all podcasts should be free.

The podcast world is growing with major acquisitions, expanded marketing efforts, more distribution outlets, and a number of venture backed companies competing alongside huge companies like Apple and Spotify. For a thoughtful analysis of the larger ecosystem around podcasting I recommendthis article from fellow Forbes.com contributor Jay Kapoor. And if you are trying to find something new in the podcasting realm to listen to, Spotify has launched a series of charts in various countries showing the most popular podcasts, as well as the rising, up-and-coming podcasts.

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Originally Posted on Forbes

As the second half of the calendar year begins, many on Wall Street and Madison Avenue are wondering where advertising revenues will net out for the first half of the year and what the second half of 2020 will be like for the advertising market.

EMarketer recently predicted that in 2020 Google’s US advertising revenue will decline by just over 5% by end of the year. This is the first time, according to eMarketer, since 2008, that Google’s US digital ad revenue will decline. EMarketer had estimated that US ad revenues would grow about 13% before the Covid advertising recession hit. Google’s US market share for search advertising is projected to go down from 61.3% to 58.5% in 2020. Google makes up a huge portion of the total revenue of Alphabet, its parent company. Emarketer predicts that total advertising revenue in the US for 2020 will be $134.7 billion – an increase just under 2%.

These Covid-related headwinds for Google come along at the same time as Facebook is dealing with a boycott of Facebook advertising by numerous companies. Nonetheless, eMarketer still forecasts a small increase for Facebook’s advertising revenue in 2020. Amazon, who has been on a tear in selling advertising, is projected to have in 2020, an increase of 23.5% over their US advertising revenue last year, despite the Covid pandemic.

All of these media companies will have to deal with the constant shifting of the sands in the Internet

advertising landscape. Will Snapchat become a bigger player in the advertising arena? Will TikTok’s US advertising revenue grow at scale enough so that they too

become a bigger player in the advertising marketplace? Will the AVOD (Advertiser-supported, free, video on demand) digital video services eat into TV advertising marketing dollars? Who knows what the next “new thing” will be that will attract consumers’ and their eyeballs? Overtime, it is clear that ad dollars follow consumers’ eyeballs. We will know the actual revenue results for Alphabet and Google when Alphabet reports its second quarter earnings on July 23.

As Mike Kelly, former CEO of The Weather Channel and a long-time executive in the advertising and media world, said to me in an interview, “It is almost inevitable, that as competition increases from all comers, that Google will revert back to something closer to their ‘fair share’ of the ad market. After all these years, search is still their dominant product. As consumer intent and discovery (and attention) shifts to other platforms, so will the advertising dollars.” 

On the other hand, another major business model of the Internet – ecommerce – is likely to have a very strong year of growth. Ecommerce is poised to grow 18.0% following a 14.9% gain in 2019 according to eMarketer.

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New estimates as to the impact of the Covid-19 pandemic on advertising revenue in 2020 and 2021 have been issued by Magna Global, a unit of IPG Mediabrands that provides media intelligence, such as on-going estimates of worldwide advertising revenue. Magna predicts that total worldwide ad spending will end 2020 down by 7%. In the U.S., if you remove the once every four year advertising tidal wave driven by Presidential and other political campaigns, then Magna estimates that U.S. advertising revenue will be down 6% for 2020.

Other analysts generally agree with Magna’s estimates, such as Raghu Kodige, Co-Founder and Chief Product Officer of Alphonso, a TV measurement and data company based in Silicon Valley, who said, “This is a reasonable, if modest estimate, given that we’ve already logged 25% of the year in a lower-spend environment with major tentpole marketing events, like March Madness, completely shut down.”

The digital ad spend is projected to be flat year-over-year by end of 2020 worldwide and up a bit in the U.S. for 2020 at a 2% projected increase. Magna says: “The most resilient formats will be digital video, as well as social media ads.” Digital spending had a very good Q. 1 this year and there are already signs of the third and fourth quarter bouncing back.

wrote about the falling advertising revenues caused by the Covid-19 recession last month here at Forbes.com and the new data from Magna shows clearly that traditional advertising is under a lot of pressure (particularly print and TV) and digital spending is showing some strength into the second half of 2020 and the full year of 2021.

Jonah Bloom, former Editor-in-Chief of AdAge and currently CMO of Kinship, a start-up dedicated to improving people’s friendships and networking, said there is, “a long-term, ongoing shift, that isn’t going to change regardless of market conditions,” as “brands continue to spend more on customer experience, and (related) technology and content.”

In 2021 Magna expects that advertising spend worldwide, and in the U.S., will rebound based on the GDP growth expected in 2021. Vincent Letang, Executive Vice President and Managing Partner, Global Market Intelligence at Magna, said, based on well-respected estimates of likely GDP growth in 2021, that the GDP is forecast to grow in the U.S. by 3.1% to 4.7%, according to macroeconomic forecasts issued by the Federal Reserve Bank of Philadelphia and the International Monetary Fund, respectively. These GDP estimates are likely to translate into a U.S. growth in 2021 advertising by 4% approximately, Letang estimated.

The unknowns, both in the advertising world, and across our economy, are immense as we go through this once in a lifetime event. As Josh Sternberg, editor and writer of the Media Nut, a daily media business newsletter, and a former journalist at Adweek, NBC News, Washington Post, and Digiday, said “We have no idea how bad it’s going to get.” He expressed worries to me that with the end of the stimulus, continued unemployment and a virus that is not under control yet, “it’s hard to see ad spend bouncing back.”

Though there is a lot of data and experience to back the Magna estimates, which are similar to other predictions about the next few years in the advertising industry, you still wonder if the Chinese Poet from the 6th Century BC, Lao Tzu, was wise when he said, “Those who have knowledge, don’t predict. Those who predict, don’t have knowledge.”

Snap, like Facebook FB in its earlier years, is frequently being viewed, in terms of success or failure, from the point of view of monetization. It is relatively easier to acquire a large audience to use a free service like Snapchat, than it is to monetize those consumers and achieve large-scale advertising revenue growth.

In a further step toward enhanced monetization, Snap announced last year a new automated advertising product, Dynamic Product Ads (DPAs) in the U.S. and selected other countries. Snap has just recently extended that product to more countries in Europe, the Middle East, and Australia.

DPAs are appealing to e-commerce advertisers because it allows retailers and brands to more easily sell their services and products to consumers using Snapchat. Google GOOGL and Facebook already offer similar ad products, where an e-commerce catalog is uploaded into a template on a digital platform and then updated in real-time. The benefit to consumers is that they will get up-to-date listings of products and prices. The benefit to advertisers is that they will save time over previous methods of updating e-commerce digital listings.

Rob Seidu, the senior director of media activation in Europe for Adidas said they have seen an increased return on advertising spend during their test of Snap’s DPAs. “The launch of DPAs allows us a route to reach our target Gen Z and Millennial audiences with relevant product creative throughout the consumer journey,” Seidu said.

Long-time digital media observer and experienced revenue executive in the digital world, Michael Hudes, observed, “Snap’s move to launch dynamic ads is a no brainer move for all of the obvious reasons and on the surface, far from innovative. The real question is how does Snap deliver a user experience that performs for a wide swath of brands and not just direct response – D to C – advertisers?”

In the period leading up to Facebook’s IPO many analysts doubted Facebook’s ability to monetize particularly in the mobile environment. But once Facebook demonstrated rising advertising revenue with good margins, the stock took off and has been a darling of Wall Street.

While Snap’s stock price has moved up considerably in the last year, as they increased revenue and demonstrated the value of their many US and European users, they are still trading below their high. Snap has other efforts underway to increase their advertising revenue, including an advertising network across many sites and apps, not limited to Snap properties.

Snap has continued to hire advertising sales people from some of the leading digital companies, like Facebook, Amazon AMZN, and Google. Snap continues to take more and more steps toward demonstrating they can grow their primary revenue stream – digital advertising.