Dive Brief:

• U.S. advertisers will boost their media spending 7.2% to $389.5 billion this year from 2019 as the summer Olympics and presidential election drive growth, per an estimate that consulting firm Winterberry Group shared with Marketing Dive. The forecast appeared in a report titled "The Outlook for Data Driven Advertising & Marketing 2020."
• More than 57% of the total spend, or $223.1 billion, will be on offline channels such as linear TV and experiential marketing, making offline outperform the $166.4 billion spent on online media. Spending on magazines will drop 9.7% to $9.8 billion, while newspaper ads will see a 9.1% decline to $11.8 billion and radio will slip 1.7% to $13.6 billion. Among digital media, influencer marketing will see the fastest growth with a 32.4% jump, followed by the 31.6% gain for over-the-top (OTT) and streaming services. Paid social will grow 17%, while digital display ads and digital audio including podcasts are set to rise 15.1%, respectively.
• "While privacy is a pillar of concern, it is also driving demand for improved data management and analytics, which we expect to see grow at a healthy clip in 2020," said study author Bruce Biegel, Winterberry's senior managing partner.​

Dive Insight:

Winterberry's media spending forecast indicates that digital channels will continue to see more growth, even as they become increasingly fragmented among high-growth areas like OTT and streaming platforms, influencer marketing and digital audio such as podcasts.

The Olympics and upcoming presidential election will boost spending on linear TV, helping offline channels to bounce back from 2019's decline of 5.9% to $218.1 billion from a year earlier. However, the longer-term trends point to a steady slide for traditional media channels including linear TV, radio, newspapers and magazines.

The forecast reflects the broader shift in media consumption to digital channels. Millions of households are canceling cable and TV subscriptions while signing up for OTT services like Roku or streaming media platforms like Netflix, Hulu and Disney+. Streaming services offer a variety of ad-free and ad-supported tiers, giving marketers the possibility to reach consumers who are open to seeing ads in exchange for free or lower-cost services. The streaming video marketplace will crowd in 2020 with the launches of Peacock from Comcast's NBCUniversal and HBO Max from AT&T's WarnerMedia.

Analysts expect advertisers to continue to up their spending on data to support efforts to improve ad targeting, although stricter laws like the California Consumer Privacy Act (CCPA) that took effect on Jan. 1 may blunt the effectiveness of data-driven strategies. Spending on services including data, analytics, technology and integration will rise 6.3% to $23.2 billion this year from 2019, Winterberry forecasts.

"While CCPA in 2020 is an overhang on the market, we currently expect its true impact on third-party data spend to be felt later in the year as marketers catch up to compliance demands," Biegel said in the report.