Zenith adspend forecasts: industry reaction
Internet advertising will reach 52% of global adspend within the next two years, according to Zenith’s latest adspend forecasts. However, by 2021 growth in the category is expected to drop to its lowest rate in two decades.
Here, industry experts weigh in on the findings.
Julia Burton Brown, International Sales Director, Inskin Media
The latest Advertising Expenditure Forecast from Zenith highlights the enduring strength of internet advertising, with the news that it will exceed half of global adspend by 2021.
Predictably, this is being driven by investment in online video and social media, but – as highlighted – this is likely to slow as the internet ad market matures.
The roll out of 5G may, however, encourage larger brands to think more proactively and creatively about the possibilities online advertising can offer them. Display, for instance, has proved its effectiveness for brand messaging time and time again in recent years, even in the face of concerns around bots and ad-fraud. Traditional media still has its place of course, but with improved speed and performance of wireless internet connections, we’re likely to see consumers streaming more and more content through their phones or tablets which brands will need to be prepared for.
Although it is disappointing to see that spend has fallen in Germany, with steady growth in Western & Central Europe expected to continue, it’s a positive result for the region overall. As for the UK in particular, the fact that adspend is predicted to grow this year by 3.9% is testament to the industry’s ability to weather all storms, even in the face of ongoing uncertainty around Brexit.
Digital advertising is continuing to grow exponentially across the world, with the Zenith report predicting that internet ad spend will make up 52% of the total by 2021. North America’s ad market in particular has been boosted by the influx of new small and medium sized brands, empowered by the reach of platforms like Facebook and Google. In addition, self-serve platforms are democratising marketing and making targeting and measurement easier and more accessible.
As more brands see the benefits and targeting capabilities afforded by digital marketing, and the ease with which self-serve platforms provide quick, targeted advertising, the temptation will be to plough money into the metric of the moment, which may not deliver fully integrated or effective campaigns.
Brands should consider the full mix of channels and continue to build brand awareness in innovative ways, using data to inform creative and to diversify media buying across channels, seeking expertise where necessary and avoiding the temptation to ‘go it alone’.
It is encouraging to see that the advertising market is continuing to thrive globally. With Zenith predicting that internet advertising will, for the first time, exceed the 50% mark and account for 52% of global advertising expenditure in 2021, it is clear that advertisers’ confidence in the value of digital remains strong.
This overall growth is spearheaded by the increase in online video and social media as preferred platforms to advertise, as the mobile viewing experience continues to develop and become more sophisticated and engaging for consumers.
The digital advertising industry still faces a lot of challenges, notably in the form of brand safety and transparency in the supply chain, so it is important that positive growth is equally supplemented by improvements in industry standards and robust regulation.
The fact that global digital ad spend is predicted to hit 52% by 2021 is testament to advertisers’ continued confidence in digital advertising. This is reflected by IAB UK and PwC’s latest Adspend report, which recently reported 15% year on year growth in UK digital ad spend.
Yet, as we all know, unlimited growth is not infinitely sustainable and, with Zenith’s forecast anticipating a slow-down in global growth in the next three years, it’s vitally important that our focus continues to be on creating a sustainable and responsible digital advertising industry. Initiatives such as IAB UK’s Gold Standard are crucial to achieving this and we’ll continue to encourage cross-industry adoption, to the benefit of the whole ecosystem.
It’s also important that we don’t solely see growth through just one lens. As the market matures, we are starting to see brands’ use of digital evolve and new strategies emerge. Advertisers are increasingly considering how quality environments and contextual creative impact campaign performance, while the growth of a burgeoning direct to consumer market is reshaping the status quo when it comes to brand building in the digital space.
What’s more, with formats such as VR, voice and streaming set to go mainstream with the introduction of 5G, digital is arguably a more dynamic and exciting option for advertisers than it ever has been before.