Marketers plan to increase the amount spent globally on digital advertising in the next two years, with the majority invested in paid search and social media, according to data released Monday.
Zenith’s Advertising Expenditure Forecasts estimate the total amount spent will increase from $86 billion to $109 billion on paid search, and from $48 billion to $76 billion on social media. The report cited artificial intelligence as the technology that is helping to improve targeting and conversions.
Higher performance is expected to drive an average of 8% annual growth in paid-search advertising spend between 2017 and 2020. Voice search also will drive higher adoption and spend rates.
Social media, however, is growing faster than paid search. In fact, it is growing at twice the rate, by 16% through 2020.
The growth in social media advertising has come with the replacement of static ads with video ads. Social video ads have acted more as a complement to television ads than a competitor, 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 predicts that global ad expenditures will grow 4.5% in 2018 to $581 billion -- confirming the numbers published by the company in June. The increases in ad spend published today in some markets offset the downgrades in others. The new forecast is $1 billion above previous predictions, mainly because of changes to estimates in the Middle East and North Africa (MENA).
In MENA, estimates were added for Iraq, Jordan and Syria, as well as channels targeting Asian-language speakers across the region. Zenith now estimates that ad spend shrank by 40% between 2014 and 2017 -- more than its previous estimate of 33%.
Zenith forecasts an 11.5% decline in 2018, followed by 4.9% decline in 2019, before the market stabilizes at 0.4% growth in 2020.
The fastest-growing traditional medium is cinema, which Zenith forecasts to grow by 16% a year based on China. While still a fledgling area, it represents 0.8% of total ad spend this year. Outdoor is the strongest performer, with 3% annual growth.
Since economic growth increased this year in Canada and the UK, and demand from advertisers has been stronger than expected, Zenith revised its forecast for ad-spend growth in Canada for 2018 from 3.8% to 5.6%, and in the UK from 0.7% to 2.4%. These two revisions add $581 million to the global ad market this year. Upward revisions in Vietnam at $131 million, France at $121 million, and Taiwan at $104 million have also helped improve numbers,
Western Europe is the most improved region -- revised up from 2.3% growth in 2018 to 2.6% growth.
A recent study from Prophet came out saying that Facebook/IG, Twitter nor Snap were relevant for consumers (not even Millennials); with other metrics also suggesting the decline in relevancy of some/all of these, when's the tipping point of the ad dollars going to them?