2020 data shows highest digital ad spend in four years

The COVID-19 pandemic has played a large part in accelerating digital ad spend and digital revenue growth in the past year.

According to data from Standard Media Index (SMI), in Q1 of 2020, the majority of ad spend was allocated to offline media types, and digital only accounted for 44% of the total share. But as 2020 progressed, the total percentage of digital revenue continued to climb.

By the beginning of Q4, digital ad spend had reached 57% (13% higher than Q1), and by December of 2020, this figure reached 63% – this is the highest share digital has reached in the past four years!

A possible reason for this shift is that 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 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%).

Traditional media experienced the largest decline with newspapers, magazines, radio, and OOH, as retrieved from SMI. Reporting on the same topic, 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%.

Keeping with the theme of rising digital ad spend, Group M’s projections also show that online advertising will experience its steepest increase in the years to come. In fact, Group M predicted the digital overall share of Canada’s ad spending would surpass 60% by 2024 – but as it turns out, this has happened earlier than expected, as reported by SMI.

What does this mean for the future of the media industry? Only time will tell. 2020 was an unprecedented year and Group M’s projections do show that television is expected to return to its 2019 spending levels in 2021.

Newspapers, radio, and OOH are also expected to recover slightly, but they are not expected to return to their pre-pandemic levels. That being said, traditional advertising in printed newspapers is overwhelmingly the most trusted news source for Canadians, as reported by Totum Research (52% of Canadians trust ads in printed newspapers).