Although the COVID-19 pandemic has triggered the worst economic decline since the Great Depression, the U.S. Mid-Year Forecast Report from WPP’s GroupM predicts “only” a 13 percent decline in the U.S. ad spend in 2020—excluding political advertising—an outcome the report calls “surprising.” 

“There are some underlying trends that are important to focus on," says Brian Wieser, GroupM’s global president of business intelligence and author of the report. "First is that cuts to spending are not as widespread as might have been anticipated at the start of the pandemic."

“Most categories of marketers have sustained most of their spending, largely because their businesses have been able to mostly adapt to changing circumstances," says Wieser. "That means that there will be more competition than might have been expected for consumer attention.”

The 2009 financial crisis, which played out over months and during which financial institutions ground to a halt, led to a 16 percent decrease in marketing spend. In 2020, the coronavirus pandemic has disrupted the retail, tourism, foodservice and hospitality industries, although retailers and food marketers are adapting with buy-online, pick-up-in-store and curbside models.

The report, part of GroupM's This Year Next Year forecasts, showed declines across almost all media. For print advertising, the report anticipates a 26 percent drop in 2020 and a further 20 percent fall in 2021, continuing to lose share to other forms of media.

Audio was also expected to fall by 24 percent this year and another 7 percent in 2021, because its "exposure to retail, local and smaller business advertising will be generally unfavorable," the report said. 

Overall, the report said, audio is cost-efficient and the growth in formats, especially podcasts, is making the medium more appealing to marketers. "Digital activity–which we think accounts for 17 percent of revenue in 2020–should continue to expand its share of the medium, which, collectively, is likely to decline slightly on an ongoing basis," according to the report.

Out-of-home advertising is expected to see a slide of “only” 21 percent in the U.S. this year—less than the decline globally. The report speculates this is due to ongoing commitments made prior to the pandemic and the less-comprehensive shutdown seen in the U.S. 

For TV overall, the predictions are mixed. Total TV advertising is expected to see a decline of 7 percent in 2020 and another 12 percent in 2021. National TV is expected to see an 11 percent drop this year, but 6 percent growth next year. Digital extensions (Hulu, Roku, etc.) are predicted to see a less-steep 3 percent falloff in 2020, with 15 percent growth in 2021. 

"A potentially important assumption behind our forecasts relates to the return of professional sports," the report states. "While some incremental advertising spending could certainly follow from the resumption of play, the specific impact on spending is probably limited because much of what would end up in sports inventory would end up elsewhere if sports did not resume."

Direct mail is estimated to generate approximately $15 billion in 2020, down 16 percent on an underlying basis but only down 7 percent when political advertising is included. In 2021, the report estimates a modest 2 percent underlying decline, 11 percent including political advertising. 

Digital advertising will sustain a 2020 decline of only 3 percent, but remain flat when political advertising is included. The report expects digital to rebound in 2021, driven by the more aggressive transition of all businesses to online commerce in response to the pandemic.

“Because of the pandemic, greater numbers of businesses will adapt their businesses to hybrid online/offline models, or tie online and offline activity closer together,” Wieser said. “So we do anticipate an increase in the share of budgets going into digital media as a consequence.”