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Digital ad spend in Europe resilient in face of pandemic

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Digital ad spend in Europe resilient in face of pandemic

Advertising spend in Western Europe fell 6.3% year over year in 2020, less than the expected 10.3%, as digital mediums performed better amid the coronavirus pandemic than expected.

The forecast for digital expenditure in Western Europe in 2021 was revised up to $72.20 billion by Magna Global, a subsidiary of Interpublic Group of Cos. Inc. This is compared to Magna's previous forecast of $62.01 billion, made in mid-2020.

Digital media's resilience to the economic impact of the pandemic was "stronger than expected," Vincent Létang, executive vice president of Global Market Intelligence at Magna, said.

"The pandemic triggered a tremendous acceleration in both supply (digital media usage and audiences, ecommerce) and demand: small businesses embracing digital media to keep their business alive during lockdowns, big brands pivoting towards lower-funnel marketing channels as they typically do in recession times," Létang said.

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In Central and Eastern Europe, total ad spend in 2020 fell 4.7% year over year, compared to an expected decline of 7.7%.

Digital advertising expenditure in Central and Eastern Europe is expected to reach $10.29 billion in 2021, up from the previous forecast of $9.44 billion.

Expenditure on digital formats, including desktop, mobile, social media and online video, will rise to $91.44 billion by 2025 in Western Europe, according to Magna Global. In Central and Eastern Europe, it is forecast to hit $14.83 billion.

Forecasts for non-digital, or linear, advertising across Europe were also revised up, although spend will never reach pre-pandemic levels. Linear ad spend is expected to total $48.41 billion in 2021 in Western Europe and $10.01 billion in Eastern Europe.

The return of certain televised events, such as major sporting tournaments, and economic recovery will lead to an increase in linear advertising budgets in 2021, but the focus will be on digital mediums, Létang said.

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