Advertisers will spend more on social media platforms than on print for the first time this year, according to Zenith’s latest Advertising Expenditure Forecasts.
Advertising expenditure on social media will grow 20 per cent in 2019 to reach US$84 billion globally, while advertisers’ combined expenditure on newspapers and magazines will fall 6 per cent to US$69 billion.
Zenith predicts that social media will be the third-largest channel for advertising in 2019, with a 13 per cent share of global adspend, behind television (29 per cent) and paid search (17 per cent). Its growth is slowing as it matures, and is forecast at 17 per cent in 2020 and 13 per cent in 2021, when it will account for 16 per cent of all global ad spend.
“Social media advertising gives brands the opportunity to drive growth by using automated tools to optimise their campaigns for key business objectives,” said Matt James, Zenith’s Global Brand President.
“By using first-party data from their own websites to identify potential customers on social media, brands can convert consumers who are already on the path to purchase and target look-a-like audiences more effectively.”
Meanwhile, paid search advertising will exceed US$100 billion for the first time this year, reaching US$107 billion by the end of 2019. Paid search is growing at 8 per cent a year and will amount to US$123 billion in 2021, when it will account for 18 per cent of total ad spend.
US small businesses are driving online ad spend as other regional markets slow
Zenith said that the US ad market is now the source of nearly half of global ad spend growth. The company expects it to contribute 48 per cent of new ad dollars this year, and 46 per cent between 2018 and 2021.
“The main sources of this growth are digital brands and small businesses whose ad budgets have been unlocked by the targeting and localisation capabilities of online platforms. Small businesses in the US are spending heavily on social media and paid search, and are fuelling much of the global growth of these channels.”
By contrast, Zenith has downgraded its forecasts for Europe as poor economic performance in key markets has eroded advertiser confidence.
The company said that ad spend growth is also slowing in Asia Pacific, with 4.4 per cent growth forecast for 2019, after 6.9 per cent growth in 2018.
Global ad spend remains steady overall
Overall, Zenith forecasts that global adspend will grow by 4.4 per cent this year to reach US$640 billion, down slightly from the 4.6 per cent forecast made in June. Growth is expected to remain stable at 4.3 per cent in 2020 and 4.4 per cent in 2021 (as compared to the June forecast of 4.4 per cent growth in 2020 and 4.3 per cent in 2021).