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Digital Advertising Spend Predicted To Grow 6% In 2020

September 22, 2020 Sarah Cavill

The release of the IAB 2020/21 COVID Impact on Advertising survey found that the digital media spend for the full year (FY) is expected to grow 6%, despite a decline in growth for the broader ad market.

What Areas Of Digital Advertising Spend Are Expected To Grow In 2020?

Of the digital advertising categories with a positive outlook for 2020, paid search is projected to show the fastest growth with a 26% increase in advertising spend expected.

Other digital advertising categories on the plus side in 2020 include: 

Despite an overall increase for digital advertising spend, the IAB survey on the COVID impact to advertising found several digital advertising categories likely to experience drops this year, including digital out of home, podcasts and digital audio.

How Is COVID Expected To Impact Digital Advertising Spend Across Streaming And Connected TV?

Shutterstock_1009681927 Benon, France - January 21, 2018: Woman Holding a touch pad and switching channels on France Netflix HomePage. with TV set on background.

“Consumers spent 10% more time with digital in March-July 2020 Y/Y (vs. March-July 2019)… with video (OTT/CTV) seeing particularly increased audience attention,” noted IAB in the survey report, paying specific attention to the difference in advertising spend between linear TV (-24%) and connected TV (+19%). The adoption of streaming during the pandemic has been significant. And, with many people watching their wallets, advertising-based video on demand (AVOD) platforms like Peacock and Hulu that offer free or inexpensive programming, may offer more opportunities for advertisers eager to catch the digital streaming wave at this moment of inflection. In addition, innovation in ad formats across AVOD has resulted in advertising that is less intrusive for viewers and can increase engagement for the brands advertising.

Lack of consumer interest in linear TV programming, particularly with younger viewers, could be a factor in reduced ad spending in the linear TV category. The delays and hiccups with sports, especially college football, are also a major factor. “Last season, advertisers spent $1.16 billion on national TV advertising for college football games,” reports Robert Williams for Marketing Dive.

What Should Be Expected For 2021 Digital Advertising Spend?

About 70% of media buyers still have “2021 ad dollars in flux” according to IAB. Buyers that are looking ahead predict a 5.3% uptick for 2021 compared to this year. 

The pandemic has impacted advertising budgets, but digital advertising is still considered essential for most brands and retailers. Digital advertising offers opportunities for brands to get in front of consumers at the moments they’re ready to spend. Optimized digital marketing strategies that are effective across channels are going to dominate the advertising landscape in the near future, with the impact of COVID-19 accelerating digital adoption for brands and consumers.

Are You Looking For New Ways To Transition Your Media To A More Digital Approach?

Digital Media Solutions® (DMS) helps brands flourish by offering calculated engagement, deploying a robust database of consumer intelligence to develop scalable and reliable digital performance marketing campaigns that engage consumers and grow businesses.

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About the Author

Sarah Cavill

With more than 20 years of writing, editing and reporting experience, Sarah Cavill brings to Digital Media Solutions (DMS) a fine-tuned and diverse set of skills. Her work has been featured in notable publications including The Daily Muse, CBS Local, Techlicious and Glamour magazine. Sarah has a passion for current events and the deep-dive research that goes into the content development and brand identity of DMS Insights. In her role as Senior Marketing Communications Writer, Sarah contributes to the pitching, researching and writing of multiple stories published each week surrounding digital and performance marketing innovations in pop culture, news, social media, branding and advertising.

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