Online ads will account for over half of a forecast $660bn global ad spend for the first time this year – with the Alphabet/Facebook ‘duopoly’ taking 35 cents in every ad dollar, according to WARC Data, this despite the first growth for traditional media since 2011.
Traditional media, combined, are expected to record 1.5% growth to $324.2bn, but internet investment is growing almost nine times faster, at 13.2%. And advertising revenue for the duopoly is forecast to reach $231.9bn in 2020, having topped the TV total for the first time in 2019.
James McDonald, Managing Editor, WARC Data, and author of the research, noted that “internet ad growth has been far stronger than the state of the global economy would suggest, rising seven times faster on average since 2015. But, regulation aside, online platforms are bound by the law of large numbers, and revenue growth is easing for key players like Alphabet and Facebook.”
That said, Alphabet’s ad income is forecast to rise 10.5% to $149.0bn worldwide, equivalent to 23 cents in every ad dollar. A full 72.4% – $107.8bn – will come from Alphabet’s core Google search platform; this gives Google a 77.0% share of the global search market. YouTube is expected to earn a further $18.5bn for Alphabet in 2020, a 22.1% rise from 2019 and equivalent to 29.0% of all online video adspend worldwide.
Facebook’s ad revenue is projected to rise 19.0% to $82.9bn; much of this growth is organic though the social network will benefit from the US presidential campaigns this year. Amazon’s ad income is set to rise 21.4% to $17.1bn, Twitter’s 9.2% to $3.3bn and Snap’s 34.1% to $2.3bn. All will contribute to an overall rise of 13.2% in internet ad investment this year, to a total of $335.4bn – over half (50.9%) of the global total for the first time.
The traditional media total is expected to be boosted by a return to growth for TV; here, spend is set to rise 2.5% to $192.6bn, helped in no small part by the US presidential election campaigns and the Summer Olympic Games in Tokyo. Further, losses from print advertising are expected to be half their recent average, while radio (+1.8%), out of home (+5.9%) and cinema (+5.0%) are all expected to post gains.
The research notes that the projections are subject to the severity of the unfolding coronavirus outbreak. “We are yet to amend our forecasts in light of the COVID-19 situation, as we would expect – if the crisis is contained – displaced spend to be reallocated later in the year,” said McDonald.
“Advertising’s relationship with GDP is strong, but a slowdown in economic output as a result of the virus will not necessarily translate into reduced advertising investment,” he added.
“If events such as the Tokyo Olympics and UEFA Euro 2020 tournament are postponed or cancelled, however, we would expect a notable impact.”
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