Author: Tronserve admin
Wednesday 28th July 2021 02:17 PM
U.S. Ad Market Faces Longer Road To Recovery As States' Reopening Efforts Sputter
NEW YORK (Reuters) - Not so long ago, advertising executives were banking on the start of an industry recovery as early as the third quarter after the global coronavirus pandemic decimated marketing budgets this year.
But the rebound will be slower than expected as the restart of the U.S. economy has stumbled across many states and COVID-19 infections have spiked in key regions including California, Florida and Texas. Ad market forecasters said they are likely to lower expectations for the year.
Just last month, analysts were expecting third-quarter U.S. ad sales to decline by 4.8% versus the year-ago quarter, which would have been an improvement over the 16.8% decline in the hard-hit second quarter. But now it appears the third quarter could be “significantly worse” than a 4.8% decline due to Americans continuing to work from home and sectors such as theaters and travel taking longer to recover, said Vincent Letang, executive vice president of global market intelligence at research firm MAGNA, a division of advertising conglomerate Interpublic Group of Companies Inc (IPG.N).
MAGNA, which said the second quarter would be the worst of the year, last month also estimated the fourth quarter would recover and likely be flat from the previous year. “It’s probably not realistic at the moment, but it’s still early to tell,” Letang said of the fourth-quarter forecast.
Early signs of an economic rebound taking longer are already trickling in. Major advertiser Coca-Cola Co (KO.N) said on Tuesday it could take the global economy “two to three years to fully recover.”
The ad market is expected to gradually stabilize with each passing quarter, said Brian Wieser, global president of business intelligence at ad agency GroupM. But recent improvements in travel, a major advertising category, have started to flatten again over the past two weeks as virus cases increased across the United States, according to ad buying agency UM, a unit of IPG, which has been tracking consumer demand.