Ad expenditure on social media will grow 20% in 2019 to $84 billion, according to the latest Advertising Expenditure Forecast by Zenith Media.
The forecast predicts that social media will be the third-largest ad channel this year at a global share of 13%, ranking just behind TV (29%) and paid search (17%).
But growth will slow in 2020 (17%) and 2021 (13%) when social media will account for 16% of all ad spending worldwide.
“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.”
Paid search is set to exceed $100 billion for the first time in 2019 to $107 billion. Ad expenditure for paid search is growing at 8% per year. Zenith predicts that it will reach $123 billion in 2021 accounting for 18% of total ad spend.
But something has to give, and that will be television advertising, which is set to slip from $182 billion in 2019 to $180 billion in 2021.
The US contributed the largest share of new ad dollars (48%) in 2019 with digital brands being the major growth drivers.
Small businesses in the US have been spending heavily on social media and paid search. Spending has remained robust despite recession fears and Zenith remains a positive outlook for the US at a 5.7% growth rate.
But Zenith downgraded its ad spending forecast for Western Europe from 2.4% earlier this year to 1.9%. Central and Eastern Europe were also downgraded from 6.1% to 4.7% for 2019.
Similarly, ad spending growth appears to be stalling in the Asia Pacific region (4.4% down from 6.9% in 2018). This is partially attributed to the region’s trade war with China, which remains to be the second-largest contributor to global ad spend growth in 2019 accounting for 14% of new ad dollars.