Zenith has slightly downgraded its global ad spend growth prediction for 2019 to 4.6%, from the 4.7% it forecast in March. Global spending is expected to reach US$639 million this year.
The global media network is calling for spending to lag behind global GDP for the next three years, with ad expenditures rising by $85 billion between 2018-2021. The U.S. will account for nearly half (46%) of all new money entering the market. Ad spend in the U.S. in 2018 reached $229.7 billion, larger than that of the next eight countries combined.
Zenith predicts North American ad spending will increase 4.8% this year, boosted by what it describes as a “flood” of new and small-sized companies using Facebook and Google to advertise for the first time. It is calling for “healthy” annual growth of 5% to 2021.
Canada remains the world’s 10th largest ad market, with projected spend of $13.97 billion (US$10.78 billion) in 2018, but will be overtaken by India and Indonesia by 2021, according to Zenith.
•Internet growth slows: Internet advertising took over from TV as the world’s largest ad medium in 2016, and grew by 20% and 17% in the next two years. Zenith is calling for 12% growth this year and an average of 10% to 2021, when it will account for more than half (52%) of all global spending. Meanwhile, TV is expected to hold a 26.5% share of global spending by 2021, the lowest on record.
•Mobile vs. Desktop: Advertisers spent more money on mobile than they did on desktop advertising in 2017 (US$117 billion versus $107 billion), which Zenith attributes to a blurring of the distinction between the two.
“While for now we will continue to track mobile and desktop advertising separately, the distinction is becoming less relevant and meaningful all the time,” it said in the accompanying report.
•Print hit by digital: Internet’s growth has come at the expense of print, with newspapers’ share of global ad spend falling from 25% in the mid-1990s to 8% today, and magazines falling from 12% to 5% in the same period. Zenith predicts they will shrink by 5% and 7% respectively over the next three years, with respective market shares of 6% and 3% by 2021.
Canadian spending on the rise
Zenith is calling for Canadian ad spending to reach $14.3 billion this year (or US$11 billion), growing to $15.1 billion by 2021 (orUS$11.7 billion).
•Internet: Canadian advertisers will spend $7.9 billion in internet advertising, more than double the amount of TV ($3.2 billion) and far ahead of the country’s third largest medium, newspapers (which are expect to attract $990 million in advertising this year).
•Mobile catching on desktop: While desktop advertising continues to account for the majority of internet advertising, its lead over mobile has been steadily shrinking. Mobile is poised to attract $3.8 billion in investment this year after attracting less than $1 billion ($903 million) in spending as recently as 2014.
•Video and search: Video also continues to grow rapidly, from $928 million in 2017 to a projected $1.2 billion this year. Search will attract $3.7 billion advertising this year, with classified at $130 million.
While noting that TV continues to benefit from mass reach and high consumer influence, Zenith says that ratings and viewing are “slowly eroding,” particularly among younger demographics. Canadian consumers not only continue to shift to streaming services like Netflix, it said, but also newcomers such as CBS All Access, CraveTV and Amazon Prime.
•Out-of-home: After cracking the $500 million mark last year, out-of-home is expected to attract $546 million in advertising this year, growing to $557 million by 2021.
•Radio: Although radio is showing some signs of erosion, it will continue to hover around $1 billion for the next several years.
•Newspaper: The newspaper industry is expected to lose approximately $10 million a year through the reporting period, falling to $970 million by 2021. The industry has seen its annual revenue fall by more than $1.5 billion since 2007.
Zenith is also calling for the upcoming federal election to introduce new revenue. The 2015 election generated C$70 million in ad spend (excluding digital), of which 70% went to TV and 18% to radio.