According to the report released by the international marketing intelligence service, global advertising spend is set to rise by 7.1% to $660bn this year, guided by a 13.2% growth in internet investment. Quadrennial events such as the US presidential elections and the Summer Olympic games in Tokyo are expected to help TV spend to rise by 2.5% to $192.6bn.
“Internet ad growth has been far stronger than the state of the global economy would suggest, rising seven times faster on average since 2015. But, regulation aside, online platforms are bound by the law of large numbers, and revenue growth is easing for key players like Alphabet and Facebook,” says James Mcdonald, managing editor at WARC Data and author of the research.
Advertising’s share of global output is rising steadily due entirely to increasing investment in online formats which, taken together, are approaching half a percent of all economic activity worldwide. Historically, advertising investment’s relationship with GDP has been strong, recording a value of 0.74 since 2000. But this began to decline and may weaken further in the short-term, as internet formats continue to emerge as the dominant ad channels. Internet ad growth has been far stronger than the state of the global economy would suggest, rising seven times faster on average since 2010.
“We are yet to amend our forecasts in light of the COVID-19 situation, as we would expect – if the crisis is contained – displaced spend to be reallocated later in the year. Advertising’s relationship with GDP is strong, but a slowdown in economic output- as a result of the virus will not necessarily translate into reduced advertising investment. If events such as the Tokyo Olympics and UEFA Euro 2020 tournament are postponed or canceled, however, we would expect a notable impact,” according to Mcdonald.
Trends by media and format
TV: Spend is forecast to rise 2.5% to $192.6bn, 29.2% of all global spend this year. This only partially reverses a 4.4% dip in 2019. A third of the global TV total is transacted in the US, where TV spend is set to rise by 4.0% to $62.9bn. Just over $4bn will come from presidential campaigns.
Out of home: Spend across billboards, transport and retail/point of sale (PoS) locations are forecast to rise 5.9% to $43.5bn this year, the sixth consecutive year of growth. The sector is benefitting from the increasing penetration of digital sites in advanced markets.
Radio: Advertiser investment in radio is forecast to rise 1.8% to $32.8bn, recouping losses from a 1.3% dip in 2019.
Print: Spend is set to fall by $3.2bn, or 5.8% in 2020, but this is half the rate of decline recorded in 2019. Digital revenue now accounts for over a third of total ad income for publishers worldwide, though this share is closer to a half at the New York Times.
Social media: Spend is forecast to rise by 19.5% to $102.4bn this year, 15.5% of the global advertising spend. Facebook (including Messenger, Instagram, and WhatsApp) is expected to draw 80.9% of this investment, or $82.9bn, though this share is down from 81.2% in 2019. Just over 42% ($35bn) of Facebook’s ad revenue will come from the US this year.
Online video: Spend is forecast to rise by 21.4% to $63.7bn this year, equivalent to 9.7% of the global advertising spend.
Search: Spend is forecast to rise 12.7% to $140.1bn in 2020, 21.2% of global ad spend. Google is set to draw 77% of the market, down from 79% in 2019.
Trends by platform
Alphabet: Alphabet’s advertising revenue across Google Search, YouTube, and Google Network Members (third parties that host Google ads) is forecast to rise 10.5% to $149bn this year — 22.6% of global advertising spend (up from 21.9% in 2019).
Youtube: Advertisers are forecast to spend $18.5bn on YouTube this year, a rise of 22.1% from $15.2bn in 2019. This gives YouTube a 29.0% share of all online video advertising spend, and a 2.8% share of total ad spend.
Google: By far the largest service in Alphabet’s portfolio, Google’s ad income is expected to rise 9.9% to $107.8bn this year – 77% of global search spend and 16.3% of all ad spend.
Facebook: Advertisers are expected to spend $82.9bn across Facebook, Messenger, WhatsApp, and Instagram this year, a rise of 19% from 2019. This gives Facebook a 12.6% share of global advertising investment.
Amazon: Amazon is forecast to record double-digit ad revenue growth again this year, with income amounting to $17.1bn, a 21.4% rise from 2019. This gives Amazon a 2.6% share of global advertising spend.
Snapchat: Ad investment in Snapchat is forecast to rise 34.1% to $2.3bn in 2020, 2.2% of all social and messaging spend and just 0.3% of total ad spend.
Twitter: Twitter’s ad income is expected to ease into single digits, with a total of $3.3bn representative of a 9.2% rise in 2020.
Trends in the Middle East region
Advertising expenditure in the Middle East is expected to fall 1.7% to $12bn in 2020, following on from a 3.7% fall in 2019.