By all accounts, 2020 may be a difficult year in the advertising industry. To start, GroupM, the world’s largest media buying firm, says that next year will see a global slowdown in ad spending. Their report cites a sluggish global economy as one particular reason for the slowdown. Interestingly, the report also predicts that digital advertising will grow approximately $30 billion next year, or about 11 percent. In 2019, TV ad spending declined 3.6 percent and is “unlikely to grow in the future,” according to the report.
At the same time, another study by the World Federation of Advertisers found that global media prices will go up in 2020 by about 5 percent. Specifically, it predicts a 6.6 percent increase for television prices, a 4.2 percent increase in online display, and a 6 percent increase for online video.
One reason why prices might be going up, at least for television advertising, is the major shift to streaming services. While there are new opportunities with new platforms, the general stock of available ad units appears to be decreasing. For example, NBC Universal said last year that it would cut the volume of ads it runs during original primetime programming by as much as 20 percent. Of course, the law of supply and demand are partially at play here, and it certainly has an impact on prices.
What do these predictions mean for advertisers? Well, one thing is for sure: Those ad budgets aren’t going to go as far as they usually do, at least not without some juggling. Advertisers may ultimately pull back when facing higher prices, making the slowdown prediction a reality.
It’s times like these, though, that companies need to turn to professional media buyers. Professionals (like us) can help provide a more finessed analysis of the marketplace and make better recommendations. What’s more, we maintain relationships with networks and other media outlets, and can often negotiate lower prices.
So, if you’re feeling a little pinched with higher prices, contact us. We’re happy to work with you to make sure your budget continues to be effective, regardless of what the market is doing.