Decrease of 15.3% in advertising spending after the first half of the year. Introduction of the second lockdown unlikely
Value of the advertising market in Poland after the first half of 2020. amounted to PLN 4 billion, down by 15.3% or PLN 725.1 million yoy. The weakest months in terms of dynamics were April and May – declines of more than 30% were the result of the so-called "economic slowdown". lockdown and the crisis caused by COVID-19. In each of these months advertisers reduced their spending by ca PLN 300 million. June brought an improvement, but spending down by 15.4% is still very weak.
After six months of 2020. All media recorded declines except for the Internet. Online advertising generated a slightly higher budget, by 0.2%. Other media recorded declines. TV and radio lost 21% and 13.6% respectively, while newspapers and magazines lost 29.9% and 35.3%. The strongest negative dynamics was recorded by movie theaters – advertising spending was 60.3% lower due to the government's decision to temporarily suspend cinema operations as of March 12.
Referring to individual sectors, we observe that as many as fourteen sectors reduced their advertising investments, while only two increased them. Advertising spending increased in the two smallest sectors: computers and audio video (+9.8%) and home products (+1.3%). The largest volume declines were generated by three sectors: finance, food, automotive.
Macro data for Poland for April and May showed the scale of the economic crisis caused by the coronavirus. In April, retail sales fell by 22.9%, while industrial production dropped by 24.6%. Less than two months of restrictions on movement and use of stores and services had a very negative impact on the economy and the advertising market. In the second quarter of 2020. The value of Poland's gross domestic product declined by 8.2%. Since June, Poland's economic indicators have been gradually returning to last year's levels, but it is already certain that this year will be the worst year for the Polish economy since GDP statistics began (in terms of y/y growth).
After several months of fighting a pandemic, the situation seems to be tentatively under control. The world is learning to live in a new reality. Poland and other European countries have developed ways to stop the spread of the virus. Of course the number of infections in Poland is growing and it is hard to predict how the pandemic will develop in autumn, but it seems that introducing a second lockdown in the whole country is unlikely. Restrictions, so called. Yellow and red zones are rather local, imposed on counties with the highest number of infections. The situation seems to be under control, so we can afford to assume one scenario for the development of the advertising market in Poland this year.
We assume that no new nationwide restrictions will appear in the autumn and both the economy and the advertising market will gradually recover. We predict that starting in September advertising budgets will start to return to the levels of the previous year. Of course, on a full-year basis, the advertising market will see its biggest decline since 2009. We forecast that in 2020. advertising budgets will be reduced by a total of over PLN 850 million, including PLN 450 million in TV, thus the value of the advertising market in Poland will fall by 8.7%.
