WARC has found that advertising spend is set to rise next year across all 19 product categories monitored by WARC, culminating in global growth of 6.0 per cent to $US656bn. This is a marked uptick from the 2.5 per cent rise estimated for 2019 but is down on the 7.3 per cent growth recorded last year.
Eight product categories are set to increase advertising investment ahead of the global rate next year: financial services (+11.8 per cent), household & domestic (+10.5 per cent), transport & tourism (+9.0 per cent), telecoms & utilities (+8.5 per cent), technology & electronics (+8.4 per cent), alcoholic drinks (+6.9 per cent), automotive (+6.8 per cent) and soft drinks (+6.5 per cent). Internet is the fastest growing ad medium in each sector except technology & electronics, where out of home (OOH) is set to rise fastest at 11.4 per cent.
Globally, internet formats will account for over half of advertiser investment for the first time in 2020, with a combined value of $336bn. Investment in performance marketing, online video and social media is driving total market growth; advertiser investment excluding money spent on Facebook, Google and Amazon is flat or falling globally.
Global ad investment is flat without the Triopoly
Internet formats, combined, will account for over half of global ad investment for the first time in 2020, and social media, search and online video – the largest of these – are effectively shorthand for Facebook, Google and (Google-owned) YouTube. Google and Facebook, known as the ‘Duopoly’ drew two-thirds of online ad investment in 2018 before traffic acquisition costs (TAC) were paid out to Google’s partners, and WARC expects this share to rise closer to three quarters next year.
Amazon is small by comparison but is becoming increasingly important to advertisers looking to connect with consumers close to the point of purchase. Amazon’s share of global ad investment is forecast to rise to 2.5 per cent next year, Alphabet (Google and YouTube) 23.1 per cent, and Facebook 12.9 per cent (38.5 per cent combined). The central role these three companies – known collectively as the ‘Triopoly’ – play in advertising is stark: advertiser investment beyond them has been flat since 2012.
All product categories are expected to see growth in 2020
Growth in advertising investment is expected to be recorded within all 19 product categories monitored by WARC next year, although rates vary substantially.
The financial services category leads with a projected 11.8 per cent rise in spend to $53.4bn next year, as brands, particularly in the banking sector, are looking to connect with younger consumers on social media to inform often lifelong choices over their account provider. More than half of sector investment is directed towards online formats.
The retail sector – the largest in this analysis – is expected to post the lowest growth next year, though a 2.6 per cent rise would still be the strongest since 2013. Competition is fierce, from supermarkets to restaurants, and incremental dollars are mostly spent online, with TV, radio and print down over recent years.
Elsewhere, consumer packaged goods (CPG) sectors such as soft drinks (+6.5 per cent), food (+4.9 per cent), and toiletries & cosmetics (+2.9 per cent), are all expected to increase advertising investment in line with rising consumer spend.
WARC Data managing editor James McDonald said: “Weak macroeconomic indices, waning business confidence and rising geopolitical tensions have increased the possibility of a recession in 2020. Within this climate, our forecast of six percent growth in global advertising investment may seem optimistic, but these projections are in line with those from the IMF and Euromonitor for GDP and consumer spend, respectively.
“Incremental adspend during quadrennial events – the Tokyo Olympics and US presidential campaigns – may be muted next year but will still have a positive net contribution to global growth, as would a stronger yuan and a business-favourable ‘Brexit’. Advertisers also intend to increase spend on Google, Facebook and Amazon properties, with global media spend ultimately flat elsewhere.”
Aussie coastal lifestyle brand SurfStitch has announced a bold repositioning with a new brand identity and campaign, “Ready for Everywhere”. Reflecting the brand’s commitment to inspiring people to embrace their lifestyle, whatever it may be, the strategic shift reflects a commitment to facilitating style that adapts to the life its customers lead across a broad […]
Man of Many has Announced Key Hires Amidst a Year of Extraordinary Achievement Lead image: Naman Singh & Alex Martinez Man of Many, recently crowned B&T media platform of the year, Australia’s premier men’s lifestyle digital publication. Announces the addition of two crucial members to its team – Naman Singh as SEO Content Specialist and […]
Australian property site realestate.com.au has announced the extension of its partnership with the Sydney Swans for two further seasons. Lead image: Tom Harley, Owen Wilson and Tom McCartin realestate.com.au has partnered with the Swans since 2016 and has called the back of the club’s iconic guernsey home since becoming a major partner in 2020. This […]
Leading independent media agency, Avenue C, is thrilled to announce the appointment of Paula Lopes as Digital Director. Paula, a seasoned professional with over 17 years experience in the media industry, joins Avenue C from her role as Chief Operations Manager of KINESSO (merger of Reprise, Matterkind, and Kinesso specialities).
oOh!media brought together more than 260 of its sales, operations, commercial, marketing, finance and leadership teams last week for its national annual revenue and growth conference. Held over two days at the picturesque Rydges Resort in Hunter Valley, the event ‘Fusing people and performance’ focussed on how to build a high-performance mindset and how it […]
Free TV has welcomed the federal government’s ongoing commitment to ensuring that all Australians can access their local free television services on connected TVs through the introduction of legislation to implement a prominence framework in coming days. Free TV CEO Bridget Fair (lead image) said: “Right now, Australian viewers are being steered in the direction […]
New-generation media agency 27 Degrees Media has been appointed to manage digital media for national tyre retailer Tyreright in one of its first Australian client signings. Lead Image: Loan Morris – 27 Degrees Media CEO Under the partnership, 27 Degrees Media will be responsible for all digital media strategy, planning and buying, along with influencer […]
Brisbane performance agency farsiight has announced the launch of its new market positioning, Growth for Good, in response to a changing business landscape, marking a departure from a “growth at all costs” mentality that has defined the industry in recent years. Agency founders and brother duo, Josh and Ben Somerville, envision Growth for Good as […]
Australia’s largest privately owned transit media supplier, GoTransit Media Group, now offers unprecedented options for transit advertising in Newcastle – on both land and sea following their successful tender to supply interior advertising inside the popular Stockton Ferries. The national transit media company is already well acquainted with the thriving NSW market, having successfully operated […]
Heritage and People’s Choice have launched People First Bank, the new name for positive change in banking Australia’s largest customer-owned bank has unveiled its new brand, announcing that Heritage and People’s Choice will be unified under the new name of People First Bank. Chairman Michael Cameron said the highly anticipated new brand offered a compelling […]
L’Oréal Groupe Australia and New Zealand have announced one of the largest investments to the Great Barrier Reef Foundation to pioneer new coral restoration efforts in the region. L’Oréal Groupe Australia and New Zealand have announced today a new partnership with the Great Barrier Reef Foundation (GBRF), to help coral reefs withstand the devastating impacts […]