Ad spend is closely tied to economic activity (i.e., GDP). At this point it is a given that the European economy, like other economies, is pointed towards a recession, if not a full blown depression, and one of the first things to be cut in an economic downturns is advertising budgets. Furthermore, with professional sports (i.e. Premier League, La Liga, cricket, tennis, golf, hockey, etc.) on indefinite hiatus and the postponement of the summer Olympics until 2021 due to the pandemic there is no live sports, which accounts for a significant portion of TV ad revenue. We also know that consumers are viewing more digital video as social distancing and quarantining go into effect. How this affects long-term viewing patterns, and thus ad spend, remains to be seen, however, it is likely that there will be some lasting effect.

In Strategy Analytics most recent European Advertising Forecast (i.e., baseline forecast) we projected total ad spend to grow 4% in 2020, reaching $140.1B. This is no longer the case given the COVID-19 pandemic. While significant uncertainty exists  as to how much damage COVID-19 will ultimately inflict on the European economy we have run several scenarios based upon different economic conditions.