The COVID-19 pandemic influenced an ad recession, hitting especially hard in English-speaking markets such as Canada, the U.S., U.K., Australia, and New Zealand. Across all Anglo markets, ad spending averaged an 8% decline YOY in 2020, reports Standard Media Index (SMI). This decline added up to a loss of nearly $9.7 billion CAD, and was most pronounced in the Canadian market, with an ad spend drop of 19%, compared to the U.S. (7%), U.K. (11%), Australia (15%), and New Zealand (12%).
In Canada, the industry is made up of $11 billion in annual ad revenue. Ad spend previously on the rise (+2.8%) in the first two months of 2020, was quickly brought to a halt due to the pandemic, where industry professionals had to shift their behaviours in unprecedented ways when the market took a hit. Canadian ad spend dropped 48% YOY in Q2 (April-June), while digital media was the only media type to show an increase in spend (+8%) in the month of May. On a positive note, the market quickly began to bounce back after Q2; in Q4, Canadian overall ad spend was down only 6% YOY from 2019.
“We definitely saw the bottom of global advertising demand in the second quarter, but as the markets adjusted to a new ‘COVID normal,’ the level of demand has begun to return,” states SMI Global CEO James Fennessy.
Looking into the sharp decline in Q2 by media type (across all 5 nations), traditional media experienced the largest decline with newspapers, magazines, radio, and OOH dropping 57.1% collectively, as retrieved from SMI. Group M’s research shows that in Canada, newspapers were down 40% in ad spend. OOH was down 42.4%, magazines down 45%, audio/radio down 32.7%, and television was down 13.6%.
While these figures are bleak, Group M projects 2021 will be a more normal year in terms of consumer spending and behaviour. Television is expected to return to its 2019 spending levels in 2021, and while it is expected that newspapers, radio, and OOH will recover slightly, they do not expect to return to their pre-pandemic levels. Online advertising shows the steepest projected increase according to Group M’s data.