Ad expenditure to grow 6% in 2020 driven by social media, video and search ads

Anne Freier

In Mobile Advertising. October 25, 2019

Ad expenditure is expected to grow 6% in 2020, up from 2.5% in 2019, according to the latest Global Advertising Trends report by WARC.

Estimates for the coming year are still lower than the 7.3% uptick recorded in 2018 due to the looming threat of recession.

“Weak macroeconomic indices, waning business confidence and rising geopolitical tensions have increased the possibility of a recession in 2020,” said James McDonald, Managing Editor, WARC Data.

“Within this climate, our forecast of six percent growth in global advertising investment may seem optimistic, but these projections are in line with those from the IMF and Euromonitor for GDP and consumer spend, respectively.”

Much of the predicted rise in advertising spending is driven by online formats. Social media, video ads, and search formats are some of the most successful drivers behind Internet ad spend growth.

WARC predicts that Internet ad spend will account for more than half of global investment, but this is largely driven by Facebook, Google and YouTube.

Two-thirds of ad expenditure in 2018 were attributed to Facebook and Google and the duopoly is on track to get close to three quarters.

Amazon has grown in popularity among advertisers and now takes a 2.5% share of the market.

The report suggests that Amazon could grow more rapidly in 2020 (23.1%) than Facebook (12.9%).

Among the main product categories expected to invest more in 2020 are:

  • financial services (+11.8%)
  • household & domestic (+10.5%)
  • transport & tourism (+9.0%)
  • telecoms & utilities (+8.5%)
  • technology & electronics (+8.4%)
  • alcoholic drinks (+6.9%)
  • automotive (+6.8%)
  • soft drinks (+6.5%)

The majority of advertisers within all sectors will be using Internet ads apart from the tech and electronics business, which relies on out-of-home more heavily.