9X growth in internet investment to increase global AdEx by 7.1% to $660bn in 2020: WARC

The study also noted that traditional media combined is expected to grow by 1.5% to $324.2 billion

e4m by exchange4media Staff
Updated: Feb 27, 2020 7:21 PM

Global ad spends are set to rise by 7.1 per cent this year, upping the number to $660bn, finds The Adspend Outlook 2020 by World Advertising Research Center (WARC). The growth is attributed to the increase in internet investment, the findings say. At 13.2 per cent, it is growing almost nine times faster.

After having exceeded the TV total for the first time in 2019, ad revenue for the Facebook-Alphabet duopoly is expected to reach $231.9 billion in 2020

The study also noted that traditional media combined is expected to grow 1.5 per cent to $324.2 billion.

James McDonald, managing editor at WARC and the author of the research pointed out that internet ad growth have risen 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,” he added.

Alphabet’s ad income is touted to rise to 10.5 per cent to $149.0 billion globally, which is 23 cents for every ad dollar. Google search platform will contribute 72.4 per cent or $107.8 billion, giving it a 77 per cent share of the global search market.

YouTube is expected to contribute $18.5 billion for Alphabet in 2020, rising 22.1 per cent from 2019 of all online video adspend globally

Facebook is expected to register a 19 per cent growth in ad revenue to $82.9 billion, which is mostly organic. The upcoming US presidential campaigns is expected to contribute to the revenue.

Amazon’s ad income is expected to rise 21.4 per cent to $17.1 billion. Twitter may rise by 9.2 per cent to $3.3 billion. Snap is expected to grow by 34.1 per cent to $2.3 billion.

Together, they will contribute to an overall 13.2 per cent rise in internet ad investment this year, taking the total to $335.4 billion, more than half (50.9 per cent) of the global total for the first time.

Traditional media ad spend is set to rise 2.5 per cent to $192. 6 billion, boosted by US presidential election campaigns and Tokyo Olympics 2020.

Print advertising losses are expected to be half their recent average. Radio, out of home and cinema are expected to register gains.

The research includes a caveat about the recent coronavirus, which may impact the projections. McDonald stated, “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.”

He added that the slowdown in the economy brought on by the virus may not necessarily result in reduction of ad investment.

McDonalds also noted that the projections may be impacted if events like the Tokyo Olympics or UEFA Euro 2020 are postponed or cancelled.

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