EMMAs

Internet to claim half of all ad spend for first-time in 2020

Tyrone Stewart

Growth chart businessInternet advertising is set to account for more than half of all global media spend for the first-time next year, as mobile continues to drive the vast majority of growth, according to Warc.

This year, internet ad formats are on course to account for 47.7 per cent – or $298.1bn – of the world’s media spend and, should current trajectory continue, this will surpass the 50 per cent mark in 2020.

Internet ad formats are already responsible for the majority of media spend in eight world markets, as of 2018: Sweden (61.5 per cent), the UK (61.1 per cent), China (59.4 per cent), Denmark (57 per cent), Norway (54 per cent), Russia (52.8 per cent), Australia (51.3 per cent) and the US (51.4 per cent).

In Warc’s 12 key markets – Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, Russia, the UK and the US – the internet is forecasted to account for 52.7 per cent of media spend this year, crossing the 50 per cent mark for the first-time.

“When the Dotcom bubble burst at the turn of the century, internet advertising accounted for three cents in every ad dollar; two decades later, it will take the lion's share. While the first wave of internet growth was driven by banner ads and search keywords on desktop computers, the second phase has been propelled by social media advertising delivered on mobile devices,” said James McDonald, managing editor at Warc Data.

“Underpinning recent growth is the proliferation of programmatic ad trades based on consumers' data, harvested during day-to-day browsing, shopping, streaming and socialising. Such data will be core to future ad growth, too, as people spend more time with a broadening range of internet-connected devices.”

When internet ad growth is referenced, more often than not, that simply refers to mobile. In 2019, mobile will account for 94.6 per cent of the internet’s growth, taking a 58.8 per cent share of all internet spend – after first surpassing all other internet channels combined last year.

On the ad formats front, online display formats – including banner ads, rich media, advertorial and sponsorship, online video, and social media, among others – will bring in 45.1 per cent of internet ad spend.

Social’s share of online display is expected to reach 52.4 per cent across the US, China, and the UK this year, with Facebook accounting for 84.8 per cent of this social spend. In 2018, the three markets spent a total $38.8bn on social media ads, representing a 47.7 share of total online display ad spend.

Online video is predicted to account for one in every three dollars spent on online display ads.

A couple of industry thoughts...

Hugo Drayton, Inskin Media CEO
“Predictably, video, social media - and above all mobile - all feature prominently in the report, with Facebook’s 83 per cent of social media spend in the US a remarkable if frightening statistic.

“Especially poignant - for those of us dedicated to brand advertising – is the confirmation of digital display advertising’s strong position within online spend; not only its absolute strength, but also its continued growth of share in recent years.  Again, this is not a big surprise; the medium is gaining in maturity, and (despite continued reservations about non-human traffic, fraud and random RTB inventory) digital advertising is improving its effectiveness for brand messaging.

“Against the wider background of economic, social and political uncertainty, the establishment of a solid, effective digital advertising environment is a positive signal for our industry.”

Peter Wallace, commercial Director at GumGum
“Time and time again, the digital world has proven its ability to deliver impactful, creative, contextually relevant brand messages - so It’s no surprise to see that spend in this area is finally coming to dominate advertising budgets on a global scale.

“The fact that video investment and mobile is on the up, is a reflection of the wider consumer shifts we’ve witnessed over the past number of years, which is a preference for using visually-dominant tools and platforms as users look to consume content quickly and on-the go.

“With this will come additional challenges to brand safety and ad fraud, which most advertisers are currently combatting using word-based tools. Moving forward, it’s therefore crucial advertisers start thinking about protecting themselves against all threats online – visual and semantic.”