SMI Sees Growth in U.S. Ad Spend After 2020 Declines

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NEW YORK—After being ravaged in the early part of 2020 due to the pandemic, the U.S. ad market saw a rise in the fourth quarter, which indicates things may be turning the corner in terms of market recovery. However, it is digital, not TV, that is the primary driving force.

The end-of-year and Q4 report form Standard Media Index shows that the last three months of 2020 saw the first growth in U.S. ad revenue for the year, a 6% increase. Because of the hits in Q2 (-30%) and Q3 (-3%), the overall market decline was at 7%, but SMI appears encouraged by the trend that the U.S. is on.

The U.S. has had five consecutive months of growth, thanks in large part to the growth of digital advertising. Looking at the full year, the U.S. saw a six point increase from digital allocation in 2019 (42%) to 202 (48%). In Q4 specifically, 53% of ad spending was digital, surpassing all other forms of media for the first time.

As a result of this, TV ad spending has been on the decline. Per SMI, since starting 2020 making up about 50% of the ad spending, TV ad spending has steadily declined, finishing at 42% in Q4. However, it fared better than other forms of media (radio, newspapers, outdoor). Overall, TV ad spend dropped 3% for the entirety of 2020.

SMI also found that demand for video advertising is also shifting, at least in part, from broadcast TV to OTT/streaming.

Compared to other Anglo markets (Canada, U.K., Australia, New Zealand), the U.S. was the only one to see a decline of less than 10%.

For more information, visit Standard Media Index’s website