Commentary

Zenith Media Report Shows Small Businesses Spend All Their Ad Budgets Online

Google and Microsoft have spent decades building search platforms and helping small to medium-sized businesses use online technology to advertise and market their goods and services. Now a report, released Monday, suggests much of the growth in internet ad spend comes from small, local businesses that invest their budgets on platforms like Google and Facebook.

While traditional media remains the priority for most big brands, a large number of small advertisers spend all of their budgets online, which means these numbers skew the overall picture, according to Zenith’s Advertising Expenditure Forecasts published Monday.

Large advertisers, on average, devote considerably less than half their budgets online. Big brands are investing large sums in internet advertising, but the majority are still spending most of their budget in traditional media.

Despite the rise in ad spend, the amount spent for paid-search advertising will slow. The media in grew by 11% in 2018, accounting for 37% of internet ad spend.

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Zenith forecasts the paid-search growth rate will fall to 7% in 2021 and attributes the decline to non-monetized voice technology, where most of the innovations are taking place in search.

Internet advertising will account for 52% of the amount marketers globally will spend on advertising in 2021, up from 47% this year. The percentage exceeds the 50% mark for the first time, according to Zenith’s report.

In a report released in March, Zenith reported that paid search now lags behind display -- the fastest-growing internet subcategory, with 13% annual growth forecast to 2021.

This year, internet ad spend for display will reach $142.4 billion worldwide, with paid search trailing at $1.8.7 billion.

In 2020, those numbers are expected to come in at $159.9 billion and $116.5 billion, respectively. In 2021, marketers are forecast to spend $177.6 billion on display and $124.7 for paid search, according to Zenith.

The rise of mobile technology has changed the way brands communicate with consumers who use the internet. By 2021, Zenith’s forecast estimates that internet display ads will take 26.7% of the budgets worldwide, followed by paid search at 18.8%. Out-of-home will follow at 6.4%, and newspapers will come in at 6.2%. Television will remain the number one media overall at 28.5%.

Despite the continued domination of television, the report notes how the media can complement search. Marketers can take advantage of the increase in searches driven by a tv campaign.

6 comments about "Zenith Media Report Shows Small Businesses Spend All Their Ad Budgets Online".
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  1. Nick Beyer from CRISTA Media, July 8, 2019 at 5:11 p.m.

    Or radio! Terrestrial radio still has the largest reach of any medium (243.3 million persons 18+ monthly says Nielsen - 13 million more than TV). Also, according to the RAB, radio boosts Google brand searches by an average of 29%. Just saying! 

  2. Leo Kivijarv from PQ Media, July 9, 2019 at 10:03 a.m.

    Have a hard time believing headline and Zenith's research. In addition to radio, the backbone of yellow pages & local directories and newspapers are local small businesses, as well as regional magazines. Additionally, Zenith doesn't cover brand activation, like direct mail, public relations, coupons, and trade shows.

  3. Paula Lynn from Who Else Unlimited, July 9, 2019 at 10:03 a.m.

    Small businesses mean businesses have $100-400 or less per month. They used to use the local paper.

  4. Ed Papazian from Media Dynamics Inc, July 9, 2019 at 10:14 a.m.

    A very important point, Laurie, and one that I keep making when so called "ad revenue" comparisons are made between digital and TV---or radio and magazines for that matter. Few of the millions of mom and pop advertisers that now use digital media-----often on a local basis----would ever be seen on TV---even if digital media disappeared.

  5. Laurie Sullivan from lauriesullivan, July 9, 2019 at 10:27 a.m.

    Ed Papazian, I'm seeing a few mom and pop advertisers now and then from very small surrounding towns, probably inserted through internet TV by ZIP code?
     

  6. John Grono from GAP Research, July 9, 2019 at 5:11 p.m.

    A poor report from Zenith or poor interpreation.

    Undoubtedly the Zenith report ralates to 'measured media'.   So local newspapers, community radio, letter-box drops, local outdoor - where lots of small business money goes - would not be included because it's not counted.   I know my local paper is still chock full of ads by tradesmen.

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