According to the latest forecast by Zenith Media, ad expenditure on social media will increase by 20% this year to get to $84 billion.
The forecast expects that social media will be the third-largest channel for ads this year with a 13% global share behind paid search and TV at 17% and 29%.
Growth is expected to slow in 2020 and 2021 to get to 13%. Social media will make for 16% of the global ad spend.
‘Social media advertising allows brands to drive growth using automated tools to make their campaigns optimal to their objectives,’ said the brand president at Zenith, Matt James. ‘First-party data collected from the brands’ websites will help identify potential social media customers and brands will be able to convert them effectively.’
Paid search is expected to go beyond $100 billion by $7 billion. Paid search ad expenditure is growing 8% per year. Zenith expects to reach $123 billion in 2021, making for 18% of total ad spend.
Television advertising will pay for the expansion, slipping to $180 billion from $182 billion.
The US contributed 48% of global ad dollars driven by digital brands.
Small businesses in the US invested heavily on paid search and social media. Spending remains robust even though there are recession fears. Zenith expects a 5.7% growth rate for the US.
The company downgraded its ad spending to 1.9% for Western Europe. Eastern and Central Europe were downgraded to 4.7% for this year.
Meanwhile, growth in ad spending seems to be stalling in the Asia-Pacific region – 4.4%. This is attributed to trade wars between the region and China, which is the second-largest contributor to the growth in global ad spend.