Social media ads to hit US$50bn in 2019
In 2019, social media will catch up with newspapers in terms of adspend
Drugi jezik na kojem je dostupan ovaj članak: Bosnian
Global advertising expenditure in social media will grow 72% between 2016 and 2019, rising from US$29bn to US$50bn, according to Zenith’s new Advertising Expenditure Forecasts, published today. Social media advertising will account for 20% of all internet advertising in 2019, up from 16% in 2016. Social media advertising is growing at 20% a year and by 2019 will be just 1% smaller than newspaper advertising (US$50.2bn for social media compared to US$50.7bn for newspapers). By 2020 social media will be comfortably ahead.
Social media platforms have benefitted from the rapid adoption of mobile technology, using it to embed themselves into their users’ daily lives. For many users, social media is the focal point of their social lives as well as their main source of news. Social media ads blend seamlessly into the news feed, and are much more effective than interruptive banner formats, especially on mobile devices.
Online video to overtake radio
Online video advertising is growing almost as quickly as social media, at 18% a year, and by 2019 it will total US$35.4bn across the world, fractionally ahead of the amount spent on radio advertising (US$35.0bn). Online video is also benefiting from the spread of mobile devices, as well as the development of high-speed mobile data connections and improvements in handset displays. It is becoming common for brands to use online video as a complement to television, but for most it does not make sense to use it as a substitute. Even by 2019 online video advertising will be less than a fifth (18%) of the size of television advertising.
Steady expansion in global adspend in 2017, despite political risks and quadrennial comparison
Zenith forecasts global advertising expenditure to grow 4.4% in 2017, the same rate as we estimate for 2016. This is a strong performance, given that the unexpected results of the UK’s referendum on EU membership and the US presidential election have increased political uncertainty and raised the risks of restrictions to international trade. 2017 also faces a tough comparison with the quadrennial year of 2016, when spend was buoyed by the US elections, the Summer Olympics, and the European football championships, as it is every four years.
After 2017 we expect continued steady growth in global adspend – Zenith forecasts another 4.4% growth in 2018 and 4.1% in 2019. Global adspend growth has been remarkably stable since 2010, growing at between 4% and 5% a year, generally at or below the growth rate of global GDP. Before the financial crisis, advertising would typically exaggerate the wider economy, growing faster in times of expansion and shrinking faster during recessions, with frequent changes in year-on-year growth rates. More recently the global ad market appears to have entered a phase of more stable growth.
Global growth supported by continued rise of Asia and recovery in Eastern Europe
Although global adspend growth has been steady, it has been spread unevenly across the world. Adspend is shrinking at 4.9% a year in the Middle East and North Africa amid conflict and low oil prices, while Latin America is growing just 1.7% a year as Argentina, Brazil, Ecuador and Venezuela suffer recession. Asia is leading the way. Growth in China has slowed down markedly over the last few years, but is still 7.0% a year, and as now the second-largest ad market globally (behind only the US), that equates to a lot of extra ad dollars each year. Zenith expects China to contribute 25% of the growth in global adspend between 2016 and 2019. There are also three markets in Asia – India, Indonesia and the Philippines – where we expect advertising expenditure to grow at double-digit rates each year to 2019. These are all substantial markets, ranging in size from US$3.5bn in 2016 (the Philippines) and US$7.5bn (both India and Indonesia). Between them these three markets will contribute 12% of global growth in adspend to 2019.
Advertising in several markets in Eastern Europe – notably Russia, Ukraine and Belarus – suffered from the conflict in Ukraine; the sanctions subsequently imposed between Russia, the US and the EU; and the sharp drop in the price of oil. Adspend shrank 12% across these three markets in 2015, but they avoided collapse and have staged a recovery this year from their reduced base. Zenith forecasts 8% growth across these three markets this year, followed by 9% growth in 2017. These markets will contribute 2% of global adspend growth between 2016 and 2019.
“Social media and online video are driving continued growth in global adspend, despite political threats to the economy,” said Jonathan Barnard, Head of Forecasting at Zenith. “Just four markets in Asia will provide more than a third of global ad growth to 2019, counterbalancing recession in Latin America and the Middle East.”