Social media ad spend to surpass print for first time

Zenith, a media agency owned by Publicis Media, predicts global social media ad spend will grow 20% this year, reaching USD$84 billion. According to Zenith’s data, social media advertising will account for 13% of total global ad spend and rank as the third-largest advertising channel, behind TV and paid search.

2019 will be the first year that social media ad spend outperforms print ad spend, says Zenith, with newspaper and magazine ads generating less than $69 billion this year.

SMBs and digital brands driving social ad growth. Zenith attributes the growth across social media ad channels to SMBs shifting and adding budgets in order to take advantage of the targeting and localization capabilities offered by platforms like Facebook.

“Small businesses in the U.S. are spending heavily on social media and paid search, and are fueling much of the global growth of these channels,” writes Zenith.

Facebook reported last Friday that it estimates more than 140 million businesses are currently using its family of apps (Facebook, Instagram, Messenger and WhatsApp) every month, “To find new customers, hire employees or engage with their communities.”

During the company’s first quarter earnings report call earlier this year, COO Sheryl Sandberg said that Facebook’s top 100 advertisers accounted for less than 20% of the company’s ad revenue. “Our advertiser base is more diverse compared to the same period over last year,” said Sandberg in April, backing up Zenith’s theory that the surge in social media ad spend is a direct result of SMB ad investments.

Zenith expects social ad spend growth to level-out over the coming years. “It’s growth is slowing as it matures,” writes Zenith. The company reports social media ad spend growth will slow from 20% this year to 17% in 2020 and 13% in 2021.

Paid search ad spend tops social. The ad targeting capabilities offered by social networks is enough to help push social into the top three ad channels, but it still falls behind paid search.

According to Zenith’s report, paid search ads will take in $107 billion in 2019 and own 17% of global ad spend. This is the first year paid search ads are expected to generate more than $100 billion globally, up 8% from last year.

TV accounts for 29% of global ad spend. TV remains the top-ranking ad channel but is losing momentum. Zenith reports TV ad spend is suffering from “shrinking ratings in key markets,” and that the total spend on TV ads will decline by USD$2 billion during the next three years, dropping from USD$182 billion this year to USD$180 billion in 2021.

Why we should care. Zenith’s forecasts are based on its own client data (historical ad spend across channels, future budget plans, price negotiations with media owners) combined with local media market conditions and competitor campaign analysis.

The media agency’s data underscores how traditional advertising is losing its footing, while digital channels continue to pull more ad dollars from SMBs and brands aiming to reach niche audience.

By offering sophisticated targeting capabilities and unparalleled reach for businesses of all sizes, social and search platforms have chipped away at traditional advertising sources.

source: http://marketingland.com


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