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The advertising sector in 2020 will be worth just over 7 billion euros, the worst figure for at least 15 years: TV, Internet, Radio, Press, and Out of Home will suffer a double-digit drop.
Internet advertising in Italy will drop by 14%, and due to the COVID-19 emergency this year, the collection will drop to 2.8 billion euros, a value lower than the one recorded in 2018.
Compared to 2019, video advertising will decrease by 12% and Banners by 15%, especially influenced by the Brand Safety logics of companies. The collection deriving from the purchase of spaces on search engines (-14%), on eCommerce and Classified advertising portals (-21%) will also decrease.
This is what emerges from the latest BVA Doxa research for the Internet Media Observatory of the School of Management of the Politecnico di Milano, which analyzed the latest trends in the media and online advertising market.
The media sector in Italy showed an overall value of 15.6 billion euros at the end of 2019, down 2% compared to 2018. However, the first estimates for 2020 predicts a drop of around 14% caused by the COVID-19 emergency. If the slight decrease in 2019 was almost entirely due to the paid media components (-4%) compared to a substantially stable advertising component, it will be precisely the latter to make the worst performances in 2020, with a drop in the advertising component equal to -18%.
If you look at the use of the content, in the first months of 2020 – also due to the lockdown – 59% of Italians used at least one paid video on demand service (SVOD) and 20% used simultaneously three or more subscriptions. However, the percentage of those who intend to keep the subscription to more than two platforms active even in the post-emergency drops dramatically to 12%.
This is what emerges from the latest BVA Doxa research for the Internet Media Observatory of the School of Management of the Politecnico di Milano, which was presented at the event “Internet Advertising: more usage, less profit”.
COVID19 PUTS AT RISK THE GROWTH OF THE ONLINE ADVERTISING SECTOR – The entire advertising sales in Italy will undergo a sharp contraction in 2020 and even the Internet, albeit less than other media, will mark a decrease for the first time in its history. The estimate for this year, in fact, is a drop of at least 14% and the value could drop even below 2018 when it reached 2.8 billion euros.
However, the trend of online advertising will be the result of different dynamics that characterize the different formats. For example, let’s consider Display advertising: compared to 2019, video collection will drop by around 12% in 2020, affected both by the objective difficulties associated with the creation and production of content in the months of the lockdown, and by the planning costs that are larger than other formats, and more difficult to support, especially for SMEs. The more traditional component of the Banners, on the other hand could drop even more than 15% compared to last year, influenced above all by the logic of “Brand Safety”: in the period of maximum health emergency, in fact, many brands wanted to avoid associating their own creativity on the pages containing references to viruses, emergencies and deaths, thus limiting the delivery of campaigns on various sites, above all information.
On the other hand, for search engine advertising (Search advertising), a drop of around 14% is expected in 2020 compared to 2019. Its performance is mainly linked to the sharp drop in online sales of services related to tourism, travel, ticketing, and events, sectors that are experiencing a particularly difficult situation. The world of Classified too, with some rare exceptions, will undergo a considerable drop, estimated to be over 20% in 2019 vs 2020. Probably the only format that will grow this year will be Digital Audio advertising, albeit still marginal in absolute values and with a weightless than 1% of the overall market.
By comparing the trend of online advertising with that of other media, only television will have a drop in 2020 comparable to that of the Internet channel, while radio, press, and Out of Home will have more significant decreases, well over 20% compared to 2019. Total funding will reach € 7 billion, the worst figure for at least 15 years.
WHAT CONSUMERS HAVE TO SAY – The restrictions that forced Italians to stay at home contributed to changing some of the users’ habitual behaviors in using the media and, in particular, video content. The latter, in fact, is increasingly more connected: 59% of the respondents declare to have access to at least one SVOD (Subscription Video On Demand) service, which 38% is shared with other people living in a different place.
TV is still the main device used to see these contents. The time spent watching on-demand services on TV grows (from 52% to 55% of the total time), while it remains constant on PC (22%), and it decreases for smartphones and tablets. Furthermore, users who access these services through Smart TV (38% vs 32%) or devices that can be connected to the TV (25% vs 18%) are growing. Not only that: 66% of those who access these services declare that they have changed some of their habits to better benefit from the subscription. In particular, 18% choose titles on PC or smartphone, but then connect them to television to see them better; 15% specifically purchased a device to make their TV connected; 14% have specifically purchased a Smart TV.
On the SVOD market front, if up to a few years ago only a few operators were found, now the environment has become more lively and complex. The scenario is highly competitive, but Italian users seem unwilling to activate multiple subscriptions in order to see the most interesting content. If in the last period, in fact, 20% have used three or more subscriptions simultaneously, the percentage of those who intend to keep their subscription to more than two platforms active also in the near future drops dramatically to 12%.
As far as videos viewed via YouTube are concerned, the analysis shows that users are increasingly inclined towards content created by ordinary users (UGC, the main choice for 62% of respondents) or videos produced by Youtubers or influencers (21 %). Only 17% rely mainly on editorial/television videos. The picture changes if we analyze the generational coordinates: YouTubers and Influencers are much more relevant for Millennials (39%, against 5% of Baby Boomers). Conversely, editorial videos are the main choice for 24% of the older age group, while only 12% of the younger age group.