Three Reasons Ad Spend is Looking So Healthy for 2020

By Brendan Gill  | 

Ad spend for 2020 is looking robust with the Winterberry Group projecting that media spending in the U.S. will increase by more than 7% to reach $390 billion. That 2020 is both an election and Olympics year is, of course, helping to fuel such a significant spike over last year’s 2% growth, but that’s not the whole story. Advances in addressable TV capabilities, a maturing streaming market, continued enthusiasm for social and new opportunities linked to data analytics are also contributing to marketers’ bullish outlook. Here are a few specifics based on the consultancy group’s recently released report “The Outlook for Data Driven Advertising & Marketing 2020.”

Linear TV Looks Strong
Given two big advertising events this year it’s not surprising that 57% of overall spending, or $223 billion, will be on campaigns for offline channels, putting them back in the lead for 2020, in contrast to the 6% decline logged in 2019. More specifically, political advertising related to the 2020 presidential election along with the Summer Olympics in Tokyo will push the investment in linear TV up 2% to nearly $66 million. That makes linear TV the largest category of non-digital spend, which stands as testament to the enduring power and reach of TV ads, particularly during must-watch events like the Olympics. Experiential investment follows, with predictions for nearly $50 million this year, a 3% increase over 2019 that shows many consumers continue to value experiences over goods. Addressable TV should see the largest boost, with Winterberry predicting a whopping 44% increase to $2.9 billion. The investment might be small compared to linear and experiential, but the strong growth speaks to the growing sophistication and efficacy of addressable campaigns, a trend that is sure to continue beyond 2020.

Online On Point
Growth in digital comes thanks mostly to the exploding popularity of OTT/CTV, influencer/social marketing and podcasts. While fragmentation and competition in the streaming world is a long-term concern, for now consumers are eagerly embracing every new platform and model and advertisers are following suit. Among digital media, influencer marketing will see the fastest growth with a 32% increase, followed by a similar gain for over-the-top (OTT) and streaming services. Paid social will grow 17%. The growth in all of these categories is slower than 2019, which is to be expected as these channels mature, but reflects consumers’ growing expectations for content anywhere, at any time and on any platform that works for them in a particular moment.

Devoted to Data
According to Winterberry, spending on data and analytics technology is expected to increase by 6% as advertisers continue to seek new and more effective ways of targeting specific groups of consumers. At the same time, new privacy laws like the California Consumer Privacy Act (CCPA) are expected to blunt the short-term impact of data-driven strategies as marketers figure out how to manage the new compliance demands. Nevertheless, data investments continue with 80% of CMOs telling Winterberry they would increase spending on data analytics in 2020. As proof in the pudding, AdWeek noted that 280,000 data analytics positions are currently listed on LinkedIn.

Clearly, for advertisers, 2020 is off to a strong start with marketers continuing to capitalize on every channel and get creative everywhere to keep pace with consumers’ expectations for finding their favorite content on any screen.

Brendan Gill
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