Zenith has announced its advertising spend forecasts, revealing that it expects Internet advertising’s share of global adspend to continue to rise, reaching 40% in 2018 and 44% in 2020.
The Publicis Groupe media agency also said that adspend value will rise from US$203bn in 2017 to US$225bn in 2020 and in the most advanced markets (Sweden and the UK), it will account for more than 60% of total expenditure in 2018, and between 50% and 60% in another six markets (Australia, Canada, China, Denmark, Norway and Taiwan).
Zenith believes the Internet will account for 94% of the growth in adspend between 2017 and 2020, shared between Google and Facebook, Baidu, Alibaba and Tencent as these five platforms increased their share of global internet adspend from 61% to 72% between 2014 and 2016, and captured 83% of the growth in internet adspend over that time.
Baidu, Alibaba and Tencent also accounted for 54% of the growth in Internet adspend in China, while Google and Facebook accounted for 96% of the growth in the rest of the world and 76% of Internet adspend outside China in 2016.
When it comes to markets, Zenith predicts that only the US and China will contribute 47% of new ad dollars between 2017 and 2020, while the five biggest markets (the US, China, Japan, the UK and Germany), will contribute 57%.
It added that big cities are driving global adspend by concentrating growth in productivity, innovation and trade, with the top 10 cities alone contributing 12% of all global adspend growth this year, and that the top 725 will contribute 60%. From 2016 to 2019, adspend in New York will grow by US$1.4bn, while cities like Tokyo, Jakarta, Los Angeles, Shanghai, Houston, Dallas, Beijing, London and Chicago will grow by US$0.6bn.
“We are seeing a battle played out in business, marketing and media between big players and small players,” said Vittorio Bonori, Zenith’s global brand president. “Growth is coming from big countries and big cities, and being captured by big platforms. Brands should focus on upstream strategy, data-informed UX planning and downstream automation”.
“Internet advertising is the biggest advertising medium in the world and the biggest driver of growth,” added Jonathan Barnard, head of forecasting and director of global intelligence at Zenith. “Our unique research shows that brands are starting to use it effectively after struggling to adapt over the last few years.”
Zenith has also previously predicted that programmatic trading will account for two thirds of global digital display market by 2019.