A report prepared for the association of French digital advertising sales houses, Syndicat des Régies Internet (SRI) by Oliver Wyman estimates digital advertising revenues will shrink by 6.7 percent in 2020. In 2021, digital advertising revenues in France should recover back to their previous level in 2019.
While digital advertising revenues in the first half of 2019 stood at € 2.8 billion, those recorded in the first half of 2020 show a sharp deceleration of 8 percent to € 2.5 billion.
Every aspect of the digital advertising market has suffered, but in different ways:
- Display. Banners, video, special operations and audio all experienced a 17 percent decline in revenue. “News and Publishing” and “TV and Radio” were the two sectors that were the hardest hit.
- Search. Search is down by 9 percent. The severe drop in travel almost wiped out all advertising spend in the first half of the year for players like Google. Retail Search digital advertising has continued to grow at a rapid pace, especially due to the success of ecommerce during the lockdown.
- Social. Social networks suffered a minor decrease of 5 percent in digital advertising revenue. Facebook, which represents a very large share in this category, benefits from Instagram’s success, exposure to small and medium businesses, and the ease of use of its products. The gap between the trio Google/Facebook/Amazon and the rest of the market is widening.
With an 18 percent decline, France has experienced one of the greatest declines in advertising investment in Europe. As in 2008, multi-media advertising investments were among the first expenditures cut by advertisers.
The health crisis has had a very negative impact on the digital advertising market. Search and Social have held up better, driven by players such as Google, Amazon, and Facebook, which benefited in particular from their exposure to small advertisers. While signs of recovery observed since the beginning of June are encouraging, the 2020 forecasts nevertheless point to a declining advertising market, with a very significant shortfall that could exceed € 1 billion. However, the forecasts for 2021 give cause for optimism, with an anticipated return of digital advertising revenues in France to their 2019 level.Emmanuel Amiot, Partner Communication, Media and Technology at Oliver Wyman
Digital advertising revenues are down by 8 percent in the first half of 2020
Digital advertising market in France
Growth by major channels and weight in the market
Notes 1. Other Channels include Affiliation, Comparators and Emailing
Sources: SRI, UDECAM, Interviews carried out over the period of May and June 2020 with market players, public information, Oliver Wyman analysis
Click here to view the full report from SRI, Oliver Wyman and UDECAM.