Zenith Forecasts 20 Percent Growth for Social Media Advertising in 2019

Advertisers will spend more on social media platforms than on print for the first time in 2019, according to Zenith’s Advertising Expenditure Forecasts, which was published earlier this month. Advertising expenditure on social media will grow 20 percent this year to reach $84 billion, while advertisers’ combined expenditure on newspapers and magazines will fall 6 percent to $69 billion.

Social media will be the third-largest channel for advertising this year, with a 13 percent share of global ad spend, behind television (29 percent) and paid search (17 percent). Its growth is slowing as it matures, and is forecast at 17 percent in 2020 and 13 percent in 2021.

“Social media advertising gives brands the opportunity to drive growth by using automated tools to optimize their campaigns for key business objectives,” Matt James, Zenith’s global brand president, said in the firm’s announcement. “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.”

Meanwhile, paid search advertising will exceed $100 billion for the first time this year, reaching $107 billion by the end of 2019. Paid search is growing at 8 percent a year and will amount to $123 billion in 2021, when it will account for 18 percent of total ad spend.

The U.S. market is driving global ad spend growth as Europe and Asia slow, the firm also noted. The U.S. ad market is now the source of nearly half of global ad spend growth. Zenith expects it to contribute 48 percent of new ad dollars this year.

Overall, Zenith forecasts that global ad spend will grow by 4.4 percent this year to reach $640 billion, down slightly from the 4.6 percent forecast made in June. Growth is expected to remain stable at 4.3 percent in 2020 and 4.4 percent in 2021.

“We would normally expect an increase in ad spend in 2020, a ‘quadrennial’ year benefiting from U.S. elections, the Summer Olympics and the UEFA Euro 2020 tournament,” the firm said. “But given current political and economic uncertainty, brands are being cautious about committing to extra spending at the moment.”