Global ad investment will grow 6% to $656 billion in 2020: WARC report

Investment

Image result for Global ad investment will grow 6% to $656 billion in 2020: WARC reportGlobal ad investment will grow 6 per cent to $656 billion in 2020, according to a forecast by market research firm WARC.

Driven by rising spend on Google, Facebook and Amazon, advertising spend is forecast to grow next year across 19 product categories, according to  WARC’s Global Advertising Trends report on product category ad investment in the coming year. The report, however, also warns of a possibility of a global recession.

“With a forecast global growth of 6%, 2020 is expected to see a marked uptick from the 2.5% growth in 2019 but is down on the 7.3% rise recorded last year,” states WARC.

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

“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,” he said.

Internet formats, combined, will account for over half of global ad investment for the first time in 2020, and social media, search and online video – the largest of these – are effectively shorthand for Facebook, Google and (Alphabet-owned) YouTube.

Google and Facebook, known as the ‘Duopoly’, drew two-thirds of online ad investment in 2018 before traffic acquisition costs (TAC) were paid out to Google’s partners, and the report believes this share could edge closer to three quarters next year.

Meanwhile, Amazon is becoming more popular with advertisers, with the e-commerce giant’s share of all ad dollars rising to 2.5%. By contrast, Alphabet will grow to 23.1%, and Facebook will grow to 12.9% . Collectively, this Triopoly’s role in advertising overall is stark: advertiser investment beyond them has been flat or falling since 2012.

Across all 19 categories measured for the report, spend is expected to rise. Eight product categories are set to increase advertising investment ahead of the global rate next year:

  • 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%)

[“source=exchange4media”]

Written by Loknath Das