B&E | Social Media Advertising to hit $50 billion by 2019 - Zenith

Online advertising will overtake newspaper ad spending by 2020

Image Attribute: Photo by Japanexperterna.se and used here with Creative Commons license.

Image Attribute: Photo by Japanexperterna.se and used here with Creative Commons license.

LONDON, Dec 5 (Reuters) - The amount of money spent on advertising on social media is set to catch up with newspaper ad revenues by 2020, a leading forecaster said on Monday.    

The rapid expansion of social media platforms on mobile devices, as well as faster internet connectivity and more sophisticated technology, has triggered a huge shift in the way many people get their news.    

Advertising agency Zenith Optimedia, owned by France's Publicis, predicts global advertising expenditure on social media will account for 20 percent of all internet advertising in 2019, hitting $50 billion and coming in just one percent smaller than newspaper ads. It expects social media to overtake newspapers comfortably by 2020.   

"Social media and online video are driving continued growth in global ad spend, despite political threats to the economy," Jonathan Barnard, head of forecasting at Zenith, said.   

The media industry has been convulsed by the rapid shift in advertising trends in recent years, with firms moving their ad budgets from traditional sources such as newspapers to websites found on computers and mobile phones.    

Marketers are increasingly directing their spending to social media sites where ads blend into users' newsfeeds on platforms such as Facebook and Snapchat proving more effective than interruptive banner formats.       

Zenith's report forecasts that global advertising expenditure will grow 4.4 percent in 2017, the same rate as in 2016, which it said would be a strong performance given those big events like the Olympic Games, Britain's EU referendum and the U.S. presidential election boosted advertising this year.

Online video advertising is also rapidly growing and set to total $35.4 billion across the world by 2019, fractionally ahead of the amount spent on radio advertising but still far less than television.    

Global spending on advertising has been stable since 2010 the report showed, although growth has declined in the Middle East and North Africa. It was expected to continue to grow strongly in China and much of Asia.

   

(Reporting by Adela Suliman; Editing by Susan Fenton)

(c) 2016 Thomson Reuters
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IndraStra Global: B&E | Social Media Advertising to hit $50 billion by 2019 - Zenith
B&E | Social Media Advertising to hit $50 billion by 2019 - Zenith
Online advertising will overtake newspaper ad spending by 2020
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