Driven by TikTok, Instagram and other platforms, global advertising spending on social media will overtake spending on television in 2022, according to the latest projections from the Zenith media agency.
In the U.S., traditional television ad spend is projected to rise 4% this year, in contrast to a growth rate of 69% for internet video over the course of 2021 and 2022.
The projections, released in advance of a presentation at Monday’s UBS Global Telecom, Media & Technology Conference, call for social media spend to rise from $171 billion this year to $177 billion in 2022, compared to $174 billion for television next year.
Social is projected to grow to $225 billion by 2024, to account for 26.5% of total global ad spend, while paid search and television will have 22.5% and 21% shares, Zenith estimates.
Social media will continue to lead globally, seeing 14.8% annual growth through 2024.
Driven by advanced TV and streaming, online video is projected to increase from $62 billion this year to $91 billion in 2024 — exceeding 50% of projected television spend for that year ($178 billion) for the first time.
Global ad spend on digital media overall is projected to grow 25% year-over-year in 2021 and 14% in 2022 — when it will exceed 60% of global spend for the first time (at 61.5%), followed by 9% and 10% growth in 2023 and 2024, when it will command a 65.1% share of the total.
“COVID-19 setbacks have extended the period of heightened digital transformation,” Zenith stated. “The pandemic has thoroughly disrupted shopping habits.”
“Many consumers who would prefer to browse and purchase in person are shopping online by necessity,” the agency continued. ‘Businesses have responded by investing more than would otherwise have been justifiable in new technology, infrastructure, organizational change – and advertising. This includes brand advertising to promote ecommerce platforms, performance advertising to direct traffic to them, and advertising within these platforms (‘retailer media advertising’) to promote specific products, all of which have surged.”
Zenith projects that advertising in retailer media networks saw 53% growth in 2020 and 47% growth in 2021, to reach $77 billion. By 2024, it is forecast to hit $143 billion and account for 27% of display and search. "Much of this will be incremental to existing ad expenditure, coming from commercial budgets previously used to negotiate for shelf space in bricks-and-mortar stores," says the report.
Continuing a “remarkable recovery” from a 3.9% decline in COVID-hit 2020, total global advertising expenditures will grow 15.6% to $705 billion this year — exceeding the pre-pandemic 2019 level of $634 billion — and add another 9.1% in 2022, Zenith now forecasts.
Growth of 5.7% and 7.4% in 2023 and 2024 will drive global ad spend to $873 billion by year-end 2024.
“Over the next three years we expect the ad market to achieve its highest rate of sustained growth since 2000,” stated Zenith Head of Forecasting Jonathan Barnard.
While ad spend in all regions is expected to continue growth above pre-pandemic levels, the U.S. will account for 48% of the growth between 2021 and 2024, Zenith said.
After a 2% decline in 2020, U.S. ad spending is projected to grow 13.8% this year, to $285.2 billion (in constant prices).
The forecast calls for U.S. growth of 8.4% in 2022, 1.8% in 2023 and 6.4% in 2024, to reach $364.9 billion. In total, U.S. spend will grow by $80 billion between 2021 and 2024.
Total U.S. TV ad spend is projected to grow 4% in 2021, to $65.2 billion, below its 2017 peak of $68.5 billion.
Network TV spend is forecast to grow 1% to $16.4 billion in 2022, and flatten in 2023 and 2024, and national cable and syndication are projected to be essentially flat from2021 through 2024.
Spot TV is projected to rise 10% in 2022, to $26 billion, driven by political spending, but decline in 2023 before rebounding by 18% in 2024 (to $28.1 billion).
Meanwhile, U.S. internet video spending is forecast to hit $34.2 billion this year (up from $24.3 billion in 2021), and $41.1 billion in 2022, for nearly 70% growth over two years. By 2024, it is projected to reach $52.9 billion.
Still, despite continuing audience losses to digital media, “Television advertising remains the easiest route to mass audience brand awareness,” and this reliance continues to fuel rapid media inflation.
Zenith forecasts that the cost of television advertising will rise by 11% in 2022, versus 4% for out-of-home, 3% for digital display, 2% for radio and zero for print.
Brands will have to confront their dependence on a medium that consistently delivers smaller audiences for higher prices,” concludes Zenith. “Brands need to make smart use of online video to mitigate television inflation,” the agency adds.