Two thirds of all the growth in global advertising expenditure between 2017 and 2020 will come from paid search and social media ads, according to Zenith’s Advertising Expenditure Forecasts, published today.
Over this period, total spending will increase from US$86bn to US$109bn on paid search, and from US$48bn to US$76bn on social media.
Paid search will grow by US$22bn over this period, while social media will grow by US$28bn, making it the single biggest contributor to growth.
Zenith said paid search has undergone constant development in recent years. “Search platforms, agencies and brands are applying ever more sophisticated artificial intelligence techniques to improve targeting, messaging and conversion,” it said on Monday.
“Search is becoming more integrated with commerce, both online – as brands shift budgets to e-commerce platforms – and offline, as retailers use location and store inventory data to match active shoppers directly with the products they’re searching for.”
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The next step in the evolution of search is voice search, but so far there has been little direct advertising through voice assistants, however, a lack of data in this area is putting off some brands.
Meanwhile, Zenith said much of the recent rapid growth in social media advertising has come as platforms have replaced static ads with more engaging video ads. So far these social video ads have acted more as “complements” to television ads than competitors, but the platforms are now competing with television more directly by hosting long-form content like sport, drama and comedy, and inserting mid-roll ads like those seen in television breaks.
Overall Zenith expects social media adspend to grow by an average of 16% a year to 2020, twice the rate of paid search.
The fastest-growing traditional medium is cinema, which Zenith forecasts to grow by 16% a year thanks to rapidly rising admissions in China. It is a tiny medium, though, representing just 0.8% of total adspend this year. Otherwise outdoor is the strongest performer, with 3% annual growth.
Overall, Zenith’s forecast for global adspend growth this year stands at 4.5%.
“Some markets have strengthened since we published our previous forecast in June (notably Canada and the UK), but these have been counterbalanced by markets that have weakened, particularly the Middle East and North Africa (MENA),” said Zenith.
“Our forecast for 2019 is also unchanged at 4.2% growth, while we have reduced our forecast for 2020 from 4.3% growth to 4.2%. Growth will therefore remain within the 4%-5% range it has maintained since 2011.”
