LONDON: Global advertising spending is expected to grow 4.6 percent in 2019, a dip from previous estimates, with Internet advertising expected to slow to single digits in 2021 for first since the dotcom bubble burst, industry forecaster Zenith said.
Zenith, owned by French advertising group Publicis , said in a report published on Monday that internet advertising would account for 52 percent of global advertising expenditure in 2021, surpassing the 50 percent mark for the first time.
The report comes during the time when advertising companies, including market leader WPP Plc., have seen clients switching to using online platforms such as Google and Facebook to reach consumers instead of using traditional routes.
Big advertising groups have sometimes been viewed as behind the curve in terms of digital strategy. Former WPP boss Martin Sorrell’s S4 Capital bought San Francisco-based programmatic ad firm MightyHive in December, with a strategy to create a pure play in the world of digital media and advertising.
Currently, 47 percent of total global advertising spend accounts for internet advertising, according to Zenith, up from 44 percent last year, but the growth rate is expected to slow down considerably as the internet advertizing market continues to mature.
“2021 will be the first year of single-digit Internet adspend growth since 2001, the year the dotcom bubble burst,” Jonathan Barnard, head of Forecasting at Zenith, said.
However, while big brands still depend heavily on traditional media, local and smaller businesses spend much larger, if not all, of their budgets on newer social media platforms such as Google, Instagram, Twitter and Facebook.
In contrast, large advertisers devote considerably less than half of their budgets to online advertising on average.
Global overall advertising spending is expected to rise by in excess of $28 billion in 2019, Zenith added, saying that half of that would be from the US. China will be the next biggest contributor, followed by the UK and India, Zenith said.