Half of all ad dollars will be spent online by 2020, equaling all combined ‘offline’ ad spend
Businesses are expected to spend US$147 billion on mobile advertising of all types next year
By Lucy Handley
Half of all global advertising dollars will be spent online by 2020, matching the worldwide combined “offline” ad spend, such as TV, print ads and billboard posters, according to forecasts.
Media agency Magna forecasts that digital media will take 44 per cent, or US$237 billion, of all ad money spent globally in 2018, with that figure reaching 50 per cent, or US$291 billion, by 2020.
All forms of digital advertising are on the up, with search advertising the largest segment by far. Marketers are expected to spend US$113 billion worldwide next year, a 12 per cent increase on 2017. Most of this search ad spend is on mobile, which is due to take 63 per cent.
Businesses are expected to spend US$147 billion on mobile advertising of all types next year, up 27 per cent on 2017. Brands have ever more ways to reach consumers and some are switching most of their ad spend online.
In March, Adidas said it would focus on digital ads over TV, with Chief Executive Kasper Rorsted saying that its younger consumers engaged with the brand mainly via their cellphones.
“All of our engagement with the consumer is through digital media and we believe in the next three years we can take our online business from approximately 1 billion euros (US$1.06 billion) to 4 billion euros and create a much more direct engagement with consumers,” he told CNBC .
Mobile platforms are experimenting with new ad formats all the time. Snapchat has just unveiled its new design, where people can swipe left for friends’ snaps and right for editorial content and shows, as well as sponsored posts. Advertisers will be happy if this results in more engagement, one expert told CNBC .
Meanwhile, Facebook is said to be testing ads that run before video content , possibly part of its strategy to optimise “ad load,” or the number of ads on a website or platform. It wants to make sure it has the right balance between “organic” posts — or content from friends — and adverts, Chief Financial Officer Dave Wehner said on a July earnings call .
But with the rush to digital advertising comes a big challenge — advertising fraud is a problem, with a new scam, “ HyphBot “, found by tech company Adform last month, faking hundreds of millions of video ad views per day.
Television is set to have a good year in 2018 due to “classic quadrennial drivers” including February’s Winter Olympics in Pyeongchang, South Korea, and the FIFA World Cup in Russia next summer, Magna said. Revenues are expected to be up 2.5 per cent to US$183 billion in 2018.
This year was also a “comeback” one for the BRIC (Brazil, Russia, India, China) countries, Magna suggested — Russia’s ad market grew 12.7 per cent this year, with India spending 11.1 per cent more than in 2016.