Social Media Ad Spend Overtakes Print For The First Time

by GoNews Desk 1 month ago Views 722
Social Media Ad Spend Overtakes Print For The Firs
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It’s a sign of the times.

Advertisers will spend more on social media platforms than on print for the first time this year, according to Zenith’s Advertising Expenditure Forecasts published recently. 

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Advertising expenditure on social media will grow 20% this year to reach US$84 bn, while advertisers’ combined expenditure on newspapers and magazines will fall 6% to US$ 69 bn.

Social media will be the third-largest channel for advertising this year, with a 13% share of global adspend, behind television (29%) and paid search (17%). Its growth is slowing as it matures, and is forecast at 17% in 2020 and 13% in 2021, when it will account for 16% of all global adspend.

“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.”

The face of media advertising is no doubt going through a sea-change, taking a big bite out of traditional media channels. Of note, however, is that many TV and print organisations are also heavily invested in their social media platforms.

Zenith also reports that India is projected as the third-largest contributor in Adspend growth between 2018-21 at over $4.5 billion and only behind the US and China. 

Meanwhile, paid search advertising will exceed US$100 bn for the first time this year, reaching US$107 bn by the end of 2019, according to Zenith. Paid search is growing at 8% a year and will amount to US$123 bn in 2021, when it will account for 18% of total adspend. Television advertising continues to suffer from shrinking ratings in key markets, and will slip from US$182 bn in 2019 to US$180 bn in 2021, accounting for 27% of total adspend in the latter year.

The US drives global adspend growth as Europe and Asia slow

The US ad market is now the source of nearly half of global adspend growth. Zenith expects it to contribute 48% of new ad dollars this year, and 46% 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.

By contrast, Zenith has downgraded its forecasts for Europe as 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% adspend growth in Western Europe this year, down from the 2.4% forecast in June.

Adspend growth is also slowing in Asia Pacific, with 4.4% growth forecast for 2019, after 6.9% growth in 2018. In this case, though, conditions have not deteriorated materially since the June forecasts, and Zenith’s expectations of growth for this year have held steady.

Global adspend growth steady at 4.3% to 4.4% a year

Overall, Zenith forecasts that global adspend will grow by 4.4% this year to reach US$640 bn, down slightly from the 4.6% forecast made in June. Growth is expected to remain stable at 4.3% in 2020 and 4.4% in 2021 (as compared to the June forecast of 4.4% growth in 2020 and 4.3% in 2021). It would normally expect an increase in adspend in 2020, a ‘quadrennial’ year benefitting from US elections, the Summer Olympics and the UEFA Euro 2020 tournament. But given current political and economic uncertainty, brands are being cautious about committing to extra spending at the moment.

Be that as it may, for companies like Facebook and Google the signs are increasingly positive, especially being driven by first-party data about users for ad targeting.