Irish advertising market to grow 8.9% this year but media prognosis ‘concerning’

Marketing group Core urges Government intervention amid shrinking revenues

The Irish advertising market will make a partial recovery this year, increasing by 8.9 per cent to €983.6 million after a pandemic-wracked 2020, according to forecasts from Core.

The expected growth will follow an estimated 14.2 per cent drop in the size of the Republic ad market’s to €903.1 million last year – a far better outcome than what was initially anticipated in the second quarter, when spending collapsed 48 per cent compared to the same quarter in 2019.

But Core, which is the largest buyer of advertising in Ireland and employs 330 people, urged the Government to intervene to support the indigenous media sector to avoid market failure.

"The prognosis for the future is concerning. Without government intervention, the number of indigenous outlets, and the range of what they cover will continue to shrink," said Core chief executive Alan Cox.

“We should not allow commercial market forces to shape the media landscape in Ireland, because this will eventually lead to market failure, with the breadth and depth of public-interest content being compromised.”

Market growth in 2021 will once again be driven by online advertising, the group said in its Outlook 2021 report.

The overall online ad market did not escape the downward pull of Covid-19 on advertisers' budgets last year. Online advertising experienced its first year-on-year decline, falling about 9.4 per cent to €477.6 million, while despite their global growth, Google and Facebook's combined advertising revenue in the Republic contracted 5.5 per cent to €403.1 million, according to Core's estimates.

This year, however, the online market will swell 12.9 per cent to €539.4 million, with Google and Facebook both expected to grow thanks to ongoing investment in video, albeit with a new competitor in the shape of TikTok.

The video segment of the online market did expand last year, increasing 6 per cent to €147.8 million. Facebook – including Instagram – accounts for 76 per cent of this activity. A further 13.1 per cent rise is expected in online video ad revenues in 2021, Core said.

Television, print and cinema

It isn’t all bad news for traditional media. After a 9.8 per cent drop in television ad revenues last year despite strong viewing figures, the television market will see growth of 6.6 per cent this year, recovering to €202.9 million as brands return to the market.

But print advertising will see a fourth consecutive year of decline, with overall spend expected to fall 5.3 per cent to €74.7 million, Core forecasts.

This comes after a “significant impact” from Covid-19, which saw classified advertising as well as local and small business advertising decline sharply. Overall print spend contracted by 25.3 per cent to €73.9 million in the Republic last year.

Digital ad revenue for national titles is expected to increase 8 per cent this year to €22.8 million, but this comes after a fall of about 14 per cent last year.

With cinemas closed for much of 2020, cinema advertising was the worst affected kind, plunging more than 80 per cent to €1.4 million.

While little improvement is anticipated in the first half of 2021, brands and audiences will eventually return to the big screen, resulting in a doubling of cinema ad spend to €2.6 million, Core said. This will still only represent a third of the cinema ad market in 2019.

Out-of-home, sponsorship and audio

After a 42 per cent dive last year as urban footfall and traffic evaporated, out-of-home advertising revenues are forecast to grow 13.9 per cent to €59.8 million this year, but the market will remain well below 2019 levels.

Sponsorship investment was also badly hit by Covid-19, shrinking almost 15 per cent to €160.6 million last year and bucking a trend of sustained growth over recent years. Despite “a feast of sport” to look forward to this year, Core expects investment will decrease a further 5 per cent.

Radio advertising fell 7.3 per cent to €102.4 million in 2020, after a 28 per cent decline in the local and direct markets, but the contraction was mitigated by Government spending, especially at national level. Government spend accounted for a third of all radio advertising last year.

The radio market is forecast to grow just 1.8 per cent to €104.2 million this year, while spending on digital audio advertising – podcasts and online streaming – will reach about €7.3 million amid an increase in consumption since last March.