In an instant, the ad industry moved from Madison Avenue to County Line Road, from a landscape of skyscrapers to single family homes and with it an accelerated but inevitable move from traditional advertising channels to digital media.

Traditional media

COVID-19, its associated lockdowns and fear of contagion sent consumers home and kept them out of stores. Automotive advertising in traditional media (down more than 25% for the year), travel (down more than 50%) and non-digital retail advertising (down more than 20%) were key categories in 2020's advertising spending decline.

But there’s hope.

"Traditional media made a gradual rebound through 2020, recovering from lows last seen in April as the pandemic emerged. While month-over-month spending consistently returned, the gap to year-ago levels was not fully closed by 4Q, signaling there is still ground to make up," said Gregory Aston, global chief research officer, Kantar Media Division.

"A key factor to a full recovery will be the return of key industries, namely travel, auto and retail, which are still at partial capacity."

In the second quarter of 2020 alone, media advertising dropped by a third, according to Ad Age Datacenter’s analysis of data from Kantar.

Flashback to a comment made in March 2020 by Gonzalo Del Fa, president of WPP’s GroupM Multicultural. "We had a great first quarter," Del Fa said back then. "Now everyone is trying to figure out what to do next." This was not an unfamiliar refrain as agencies and marketers grappled with plans for the rest of the year.

(Download the free white paper "Marketing in the Time of COVID-19" here, published in October 2020.)

By the end of 2020, traditional media in the U.S.—TV, radio, newspaper, magazine, outdoor and cinema—had collectively dropped 15% to $91 billion, from $107 billion in 2019. (See table below.)

"Regarding 2021, I'm very optimistic from a multicultural perspective," says Del Fa. "I'm seeing the market and marketers realize they have to actively engage with multicultural audiences. For the rest of the market, I'm cautiously optimistic. Marketers realize things need to keep moving."

Election 2020

Had it not been for political advertising, things would have been worse, no endorsements intended. Kantar/CMAG (a separate division of Kantar) pegged the entire 2019-2020 election cycle's media spending at $9 billion, including Georgia's double U.S. Senate seat runoff.

Measured spot TV spending, up 8.3% to $16 billion in 2020, according Kantar Media, was the only traditional medium to grow in 2020, a hefty sum especially given that candidates for federal office are guaranteed by law to be offered the lowest unit rate for ads. (Political action committees, advocacy groups and issue advertisers pay whatever rates the market will bear.)

The Democratic primary tallies included more than half a billion dollars spent by Michael Bloomberg and more than $200 million spent by Tom Steyer. They spent in both national and local media. In the end, the fight for control of the U.S. government created a windfall for TV station owners.

Nexstar Media Group, a local TV and media company with 198 stations in 116 markets, reported $507 million in revenue from political ads in 2020, almost a quarter of the company's $2.1 billion total ad revenue for the year.

The company in a release said: "Television ad revenue inclusive of political advertising grew 37.3% in the fourth quarter as the more than seven-fold increase in year-over-year political revenue was partially offset by a core spot revenue decline as we allocated ad inventory to political advertisers. Reflecting [2019’s acquisition of Tribune Media Co.] stations and presence in states with high levels of political spending activity, 2020 fourth quarter political revenue rose by 112.8% over the 2018 midterm election cycle and increased 396.8% over the comparable 2016 Presidential election cycle.”

Similarly, station owner Tegna wrote: "Tegna generated record political advertising revenue of $264 million in the fourth quarter, including $50 million of revenue generated from the Georgia Senate runoff elections."

Digital ads

Meanwhile, digital advertising revenue soared.

Worldwide digital ad revenue was up 14.5% in 2020 for just seven large players—Alphabet, Amazon, Facebook, Microsoft, Snap, Twitter and Verizon. For the group, ad revenue topped $273 billion, according to Ad Age Datacenter analysis. (See table below.)

Ad Age Datacenter estimates more than $131 billion of that total came from the U.S.

Amazon increased estimated worldwide digital ad revenue more than 50%. Sales at the giant retailer increased 37.6% in the same time period.

Facebook reported worldwide ad revenue of $84 billion in 2020, up 20.8% from the prior year.

More to come

Traditional media and digital media are only part of the story.

Not in these tallies: Experiential, promotion and direct marketing, disciplines with aggregate 2019 U.S. spending of more than $240 billion, according to data from Publicis Groupe’s Zenith (Advertising Expenditure Forecasts, December 2020). By every indication, experiential spending plunged in 2020 as in-person events were canceled and the industry shifted to online events. Ad Age Datacenter tracks these channels annually in the Agency Report, coming May 3.

From wherever you may be, watch this space.