Social Media Passes Print As Preferred Ad Platform

• Global adspend growth to remain steady at 4.4% a year to 2021
• Adspend on social media expected to grow 20% in 2019
• Paid search advertising will exceed US$100bn for the first time
• The US ad market is responsible for nearly half of global adspend growth

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

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.”

Meanwhile, paid search advertising will exceed US$100bn for the first time this year, reaching US$107bn by the end of 2019. Paid search is growing at 8% a year and will amount to US$123bn 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$182bn in 2019 to US$180bn in 2021, accounting for 27% of total adspend in the latter year.

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. Small businesses in the US are spending heavily on social media and paid search, and are fuelling much of the global growth of these channels. Their spending has been robust throughout 2019, supported by strong household consumption, and has not so far been undermined by worries about recession or escalating trade disputes with China. Zenith’s expectations for the US ad market have held steady at 5.7% growth since the June edition of this report was published.