Social media will overtake print ad spend for the first time this year, becoming the third largest channel for advertising, according to the latest forecasts from Zenith. By offering sophisticated targeting capabilities and unparalleled reach for businesses of all sizes, social and search platforms have chipped away at traditional advertising sources.
It’s predicted that growth will slow to 17 per cent in 2020 and then 13 per cent in 2021, at which point it will account for 16 per cent of the market.
“Social media advertising gives brands the opportunity to drive growth by using automated tools to optimise their campaigns for key business objectives,” said Matt James, Zenith’s global brand president. “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.”
- Advertising spend on social media this year will overtake print media for the first time worldwide, per a forecast by Publicis-owned media agency Zenith. The agency’s Advertising Expenditure Forecast estimates that spending on social media will jump 20% to $84 billion this year, while newspaper and magazine spending will fall 6% to $69 billion.
- That growth will expand social media’s share of global ad spend to 13%, making social media the third-biggest ad channel behind TV (29%) and paid search (17%) this year. Paid search will grow by 8% a year from $107 billion in 2019 to $132 billion by 2021, when it will make up 18% of total ad spending.
- TV advertising is set to decline as ratings shrink in key markets, falling to $180 billion by 2021 from $182 billion this year, per Zenith. The firm downgraded its estimate of global media spending growth to 4.4% — from a prior forecast of 4.6% — to total $640 billion. The agency also forecast that annual spending growth will remain steady at 4.3% to 4.4% through 2021.
Zenith also forecasts that the US ad market will contribute 48 per cent of new ad dollars this year and will grow at a rate of 5.7 per cent. On the other hand, Western Europe will only grow 1.9 per cent this year, a decline in Zenith’s 2.4 per cent prediction in June, while Central & Eastern Europe is expected to grow 4.7 per cent compared to the 6.1 per cent originally expected. These forecasts are also way down on the growth experienced in 2018 of four per cent and 9.6 per cent respectively.
The growth rate of social media companies varies by company, with younger platforms tending to show the fastest increases in ad revenue. This year, the industry has seen ad revenue gains of 62% for Pinterest, 48% for Snap, 28% for Facebook and 21% for Twitter. TikTok, the social video app created by Chinese tech giant ByteDance, doesn’t disclose its ad sales, but is emerging as a disruptive force as the startup builds out its marketing platform and brands explore how to best advertise on the nascent channel.