Globally, advertisers will spend more on social media platforms than print for the first time this year, according to forecasts from Zenith, which is predicting a surge in the social channel.
Overall ad spend growth rates are slowing, however, particularly in Australia, and Zenith has downgraded its forecasts from earlier this year.
The agency today published its Advertising Expenditure Forecasts, predicting global advertising expenditure will grow at 4.4 per cent over the next three years, driven almost entirely by growth in internet display and paid search.
The rate is a downgrade from the 4.6 per cent Zenith Forecast in June, and is behind nominal GDP growth rates after exceeding them in 2018. The agency says the rate is still “steady” but is suffering from a “weaker trading market” and geopolitical uncertainty.
In Australia, total ad spend will pass AU$17 billion in 2019 but the rate of growth, at 2.8 per cent, is well behind the global average.
Social media spend is expected to grow 20 per cent to $US84 billion in 2019, according to the agency, while print has fallen six points to $US69 billion.
Social will account for 13 per cent of the US$640 billion global advertising spend in 2019, making it the third largest channel behind television (29 per cent) and paid search (17 per cent).
Matt James, Zenith’s global brand president says brands are combining first party data with social platforms and automated tools to optimise their campaigns.
“By using first-party data from their own websites to identify potential customers on social media, brands can convert consumers who are already on the path to purchase and target look-a-like audiences more effectively.”
Zenith includes social media in its display category along with traditional display and online video. Display is now the fastest growing internet subcategory, driven by the transition to programmatic buying and personalised content, according to Zenith.
On the performance of social media in Australia, Zenith’s Head of Investment, Sydney, Elizabeth Baker said “social is in a state of transition, with international platforms like TikTok,
Pinterest and Twitch gaining significant traction among younger audiences – representing new opportunities for brands”.
Locally, search ad spend is expected to increase by an average of 3.7 per cent each year until 2021, at which point it will represent 25 per cent of total ad spend at AU$ 4.3 billion.
According to the figures, globally paid search is growing at 8 per cent a year and will amount to US$123 billion in 2021, when it will account for 18 per cent of total ad spend.