The global ad market has recovered more rapidly than expected from the severe slump in Q2 caused by the coronavirus pandemic, according to new research by Zenith. The ad agency now expects ad spending to fall by 7.5 percent in 2020 to USD 587 billion, less than its forecast in July for a market contraction of 9.1 percent. The reason for the improved outlook is the boom in e-commerce.

Digital advertising is expected to grow to over half the market this year, at 52 percent of spending versus 48 percent in 2019. Zenith predicts digital ad spend will rise 1.4 percent in 2020, as more brands are forced to turn to e-commerce to maintain their relationships with customers. Euromonitor International forecasts that e-commerce sales will increase 25 percent this year, while in-store sales drop by 5 percent. The online shopping helps drive ad spending on search and social media, which are forecast to grow 8 and 14 percent respectively this year.

Overall ad market growth is expected to return in 2021, with global spending forecast up 5.6 percent to USD 620 billion. This will be supported by the delayed Summer Olympics and Euro football tournament. The forecast is slightly lower than the 5.8 percent growth forecast in July. A similar growth rate is expected in 2022, with ad spend up 5.2 percent to USD 652 billion, exceeding the 2019 level again. However, this is still about USD 70 billion less than the outlook before the pandemic.