Ad spend on social media is set to overtake ad expenditure on print, growing 20% this year to reach $84 billion, while in contrast, advertisers combined expenditure on newspapers and magazines will fall 6% to $69 billion, according to Zenith’s Advertising Expenditure Forecasts.
Breaking down ad spend across multiple channels, social media is due to become the third-largest paid channel for advertisers in 2019 with a 13% share of global ad spend. Paid search and television lead the top two with 17% and 29% respectively.
While social media is growing, the channel is slowly maturing with Zenith finding that ad spend is forecast at 17% in 2020 and 13% in 2021 – where it will account for 16% of all global ad spend.
Meanwhile, paid search advertising will exceed $100 billion for the first time, reaching $107bn by the end of 2019. Paid search will then grow at 8% a year and will amount to$123bn in 2021, accounting for 18% of total ad spend.
Television advertising, however, continues to decline, slipping from $182 billion this year to $180 billion in 2021 – accounting for 27% of total ad spend in the latter year.
“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.”
With Brexit and political uncertainly looming, forecasts for Europe have been downgraded due to poor economic performance in key markets has eroded advertiser confidence.
Germany and the UK registered small economic contractions in Q2, while year-on-year growth in Russia has fallen below 1%. Zenith now forecasts 1.9% ad spend growth in Western Europe this year, down from the 2.4% forecast in June, and 4.7% ad spend growth in Central & Eastern Europe, down from 6.1%.
“As we move into the end of the year we can see that some of the optimism for 2019 has ebbed away with the year set to finish 3.3% up in 2018. A large part of this has obviously been due to the uncertainty surrounding Brexit,” said David Mulrenan, head of investment, Zenith UK.
“The lack of certainty has meant that advertiser budgets have continued to fluctuate throughout the year. However, as we move towards some resolution, 2020 is forecast to show greater growth at nearly 5%. Unsurprisingly, most of this growth is being driven by digital channels. However, this has more to do with traditional media owners digitising their inventory and estate than new players in the market,” he continued.