Advertisers will spend more on social media platforms than on print for the first time this year, according to Zenith’s Advertising Expenditure Forecasts.
According to the report , advertising expenditure on social media will grow 20 percent in 2019 to reach US$84bn, while advertisers’ combined expenditure on print, newspapers and magazines, is expected to fall 6 percent to US$69bn.
The report concludes that these findings will make social media the third-largest channel for advertising this year. “With a 13 percent share of global adspend, behind television (29 percent) and paid search (17 percent). Its growth is slowing as it matures, and is forecast at 17% in 2020 and 13% in 2021, when it will account for 16 percent of all global adspend,” said a statement.
“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 in a statement to the press.
James added “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.”
The US drives global adspend growth as Europe and Asia slow
The statement added that the US ad market is the source of nearly half of global adspend growth. Zenith said they expect the market to contribute 48 percent of new ad dollars this year, and 46 percent between 2018 and 2021.
According to the company, 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.”
Zenith said it has downgraded its forecasts for Europe as poor economic performance in key markets has eroded advertiser confidence.
Meanwhile, adspend growth is also slowing in Asia Pacific, with 4.4 percent growth forecast for 2019, after 6.9 percent growth in 2018.
Global adspend growth steady at 4.3% to 4.4% a year
Overall, Zenith forecasts that global adspend will grow by 4.4 percent, the company said in the statement. This means it will reach US$640bn, down slightly from the 4.6 percent forecast made in June.
They added that they expect growth to remain stable at 4.3 percent in 2020 and 4.4 percent in 2021.