The Interactive Advertising Bureau, the well-respected trade group focused on digital advertising, has released its newest report projecting modest growth for U.S. digital media advertising spend for the full calendar year of 2020. The IAB expects digital ad spend to grow by 6% in 2020. Conversely, they predict that traditional media advertising will shrink by 30% vs. 2019.
Overall, IAB predicts that ad spend by year-end will shrink by only 8%. These numbers are similar to what other companies, including Zenith Media, predicted earlier in the summer.
Earlier in the beginning of the Covid-19 pandemic, as the stay-at-home orders started to crater the economy around the world, some observers expected a higher decline in ad spend for 2020.
IAB has projected a 24% decline in traditional TV advertising spend for 2020 vs. 2019. Yet they see a big increase coming for connected TV advertising, which they estimate will growth at 19% year over year.
Many advertising networks and agencies are relieved to see what appears to be a strong V-shaped bounceback for most of the advertising industry in the U.S.
Nonetheless, traditional TV and traditional print advertising expenditures remain on secular downward trends. The Covid impact on the economy has added further pain to the already suffering traditional media outlets.
One senior ad tech executive, who was not authorized to speak to the press, said that the ad industry is definitely seeing a “V-shaped bounce back in the digital advertising business.” He continued, “Our third quarter advertising revenue this year will equal our 2019 third quarter revenue, which is remarkable.” He also expects the fourth quarter ad spend to be strong, perhaps beating last year’s fourth quarter. Traditionally the fourth quarter is the most important quarter of the advertising revenue year.