Zenith has revised its global adspend forecasts for 2019 as internet adspend grew an estimated 16% last year, “markedly exceeding” the agency’s expectations.
According to the first of Zenith’s Advertising Expenditure Forecasts this year, total global adspend is now expected to grow 4.7% in 2019 to reach $623bn, a 0.7 percentage point (pp) upgrade.
The revisions come as internet advertising – which also includes advertising with digital publishers and TV-like services delivered online – experiences unexpectedly rapid growth. Zenith’s previous forecasts had expected the category to grow at a much lower rate of 12%.
Forecasts for internet advertising until 2021 have therefore been upgraded 1pp to an average of 10% a year, at which point it will account for 49% of all global adspend.
According to Zenith, growth will be driven by ‘overlapping’ channels of online video and social media, which are expected to grow 19% and 14% a year to 2021, respectively. Meanwhile, paid search and classified lag behind with a forecasted growth of 7% a year each.
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“Internet advertising will exceed a quarter of a trillion dollars for the first time this year,” said Jonathan Barnard, Zenith’s head of forecasting and director of global intelligence.
“The speed of internet adspend growth continues to surprise us, as small businesses and digital challengers provoke established brands to up their game.”
Small businesses are currently responsible for driving a large proportion of both internet advertising growth and the ad market as a whole, Zenith said, as their limited customer bases make using mass media “wasteful”.
Ben Lukawski, Zenith’s global head of strategy, added: “Brands with more than a niche market share still need interruptive advertising at scale to acquire new customers.
“As more communication takes place online, the challenge for brands is to build distinctiveness through frequent short-term exposure, rather than the occasional but longer exposures common to traditional media.”
In terms of ‘traditional’ media, out-of-home advertising is expected to experience the fastest growth as digital screens and programmatic trading become more prevalent. Between 2018 and 2021, OOH will grow by US$4.4bn.
Linear television advertising is expected to remain more-or-less stable at a 0.7% growth each year until 2021, which Zenith says will be propped up by investment from digital-native challenger brands. This follows news last week that the biggest investor in UK television advertising is online businesses, with Amazon increasing its spend on TV by 21% last year.
However, investment in print is expected to continue in decline. Between 2013 and 2018, print magazines and newspapers saw their combined share of global adspend fall from 24% to 13%, and it is expected to tumble to 9% by 2021.
The US will continue as the leading contributor of new adspend to the global market over the next 3 years; meanwhile, despite uncertainty around Brexit, the UK ad market has remained strong and is forecast to see adspend grow 4.5% this year.
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