Digital Will Surge Through 2020, Forecasts GroupM

A glance at the financials behind advertising's biggest market finds that the business at large continues to grow at a healthy pace in the United States, even as agencies, broadcasters, ad-tech platforms and major consumer brands face their own struggles. Unsurprisingly, the numbers are particularly robust for digital and political advertising. This week WPP's GroupM released its This Year Next Year: U.S. Media Forecasts, in which it reports that underlying growth in the advertising sector reached +9.5% last year. [kickout id="1"] That figure shrank to +6% when political advertising was removed from the picture. GroupM global president, business intelligence, Brian Wieser said it made sense to separate political advertising, given its surprising scale in a record year for political spending. Political advertising is expected to have a large impact on growth over the next couple of years, contributing to a +2.6% growth rate in 2019 and +8.2% growth rate in 2020 as political spending swells in a presidential election year. When political spending is removed from the picture, GroupM anticipated growth rates of +5.8% and +4.8% for 2019 and 2020. [kickout id="2"] "It's a strong advertising market," Wieser told Adweek. "[But] it doesn’t feel particularly sustainable at the level we saw in 2017 and 2018. These were unusually strong years." It's no surprise that the majority of growth is driven by digital advertising. Including political advertising, digital advertising grew at a rate of +23% in 2018. According to the report, "digital advertising continues to grow at a robust pace, if one that will slow over time." GroupM predicts that digital advertising will grow at rates of +15% and +16% for for 2019 and 2020 (with a boost from 2020 political spending). [kickout id="3"] Regarding this anticipated decline in the growth rate for digital, Wieser said, "We should be less surprised about the deceleration and more surprised about how it was that 20% or better growth rate held up as long as it did." Broadcast TV advertising is struggling by comparison. Although there was growth of +6% last year, much of that was due to political advertising in a midterm election year. Excluding political advertising, television grew by just +0.7% in 2018. GroupM estimates a decline of -5.4% in television advertising for 2019 and +3.6% growth in the presidential election year of 2020. Excluding political advertising, growth is predicted to be mostly flat in 2019 at -0.2%, with a decline of -2.3% in nonpolitical television advertising for 2020. GroupM predicts that radio will continue to decline, while OOH will largely remain stable. Underlying spending on radio advertising is expected to decline by -2.3% and -3.4% in 2019 and 2020, excluding political advertising. Including political advertising, the decline for radio for 2019 is anticipated at -4.8%, while 2020 gets a boost to -0.1%. Outdoor advertising is expected to grow by 2.5% in 2019 and +1.3% in 2020, excluding political advertising. Factoring in political advertising, growth is expected to decline to -3.2% in 2019 and climb to +8.1% in 2020.