Coronavirus impact: Predictions paint a bleak picture for media revenues in Asia

IPG Mediabrands’ Magna Advertising Forecast has predicted a sharp decline in the revenues of the media and entertainment industry. Starting with the advertising agency that will suffer the biggest blow as the coronavirus pandemic starts to show its uglier face.

The report predicts that ad spend will drop at least 9.85 in EMEA, 8.5% in APAC, 4.4% in North America, and 9.9% in Latin America. This means a global 7% drop equal to US$42 billion in lost revenue for media owners. In dollar terms, spending will drop from $582 billion last year to $540 billion

Among the worst-hit markets will be Japan and Spain (both down 14%), France (down 13%), and Italy (down 15%). Markets escaping with less damage include India (rising 2%), China (down 6%) and the US (down just 4%, thanks to anticipated election spending).

Talking specifically about China, the 6% drop in media owner revenues in 2020 will be the first decline in the history of Magna's spending records. Digital spending will represent 69% of total spending in 2020. In 2021, the market will rebound by 6.8% to end slightly ahead of the 2019 total.

A long-time adversary, Japan is also set to gain on the back of the Olympics. Economic stabilization in 2021 and the Tokyo Olympics will help adspend grow 11%

Meanwhile, in Hong Kong-China's other problem- Linear advertising is expected to decline by 34% in 2020 and will represent just 65% of total revenues. Television will decline by 40%. Hong Kong’s advertising economy is not expected to surpass the 2018 high-water mark at any time through the end of the forecast period in 2024 Just across the border, Linear spend in Pakistan is expected to decline 5% in 2020 while digital formats will continue to see double-digit growth (18%). Total advertising in 2021 will grow by 2%, still slightly below the 2017 peak.

However, the biggest surprise is here. In India, almost all media formats are expected to see a return to growth in 2021; linear sales will rise 5% and digital by 17%, leading to the overall growth of 9%.