According to a new report from Warc, advertising spend is set to rise next year across all 19 product categories, setting the stage for global growth of 6.0% to $656bn. This is a sizable rise from the 2.5% rise estimated for 2019 but is down on the 7.3% growth recorded last year.
The report from Warc said eight product categories are set to increase advertising investment ahead of the global rate next year. These include financial services (+11.8%), household & domestic (+10.5%), transport & tourism (+9.0%), telecoms & utilities (+8.5%), technology & electronics (+8.4%), alcoholic drinks (+6.9%), automotive (+6.8%) and soft drinks (+6.5%).
The internet is the fastest-growing ad medium in each sector except technology & electronics, with out of home (OOH) is set to rise fastest at 11.4%.
According to Warc, globally, internet formats will account for over half of advertiser investment for the first time in 2020, with a combined value of $336bn, while nvestment in performance marketing, online video, and social media is driving total market growth. The report added that advertiser investment excluding money spent on Facebook, Google and Amazon is flat or falling globally.
The financial services category leads with a projected 11.8% 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,” said Warc, adding that more than half of sector investment is directed towards online formats.
Alternatively, the retail sector is expected to post the lowest growth next year. On the bright side, however, the anticipated 2.6% rise would still be the strongest since 2013.
“Weak macroeconomic indices, waning business confidence and rising geopolitical tensions have increased the possibility of a recession in 2020,” said James McDonald, Managing Editor, WARC Data, and author of the research. “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.”