Third of ad spend growth to be driven by paid search and social by 2020

Third of ad spend growth to be driven by paid search and social by 2020 Mark manages all aspects of editorial on MarketingTech as Editor, including reporting on the fast-paced world of digital marketing and curating the site’s network of expert industry contributions. Originally from Plymouth, Mark studied in Reading and London, eventually earning his Master's in Digital Journalism, and most previously covered goings-on in the idiosyncratic world of performance marketing for PerformanceIN.

One third of all global ad spend growth will be driven by paid search and social media spend within the next two years, according to the latest report by Publicis-owned industry forecaster Zenith.

Annual global ad spend is on track to hit $581bn (£442bn) by the end of 2018, while Zenith raised its predictions for global ad spend growth from 4.1% to 4.5% until 2020, 67% of which will come from investments in paid search and social media ads.

Within that time, paid search will grow by $22bn (£16.8bn) to reach $109bn (£83bn), while driving the most growth, spend on social media advertising is set to rise by $28bn (£21bn) to reach $76bn (£58bn).

As such, the already domineering ad techs – Google, Facebook and Amazon – stand to benefit even further. The findings will come as unwelcome news to media agencies, such as WPP and Publicis Groupe, following an additional report today revealing that increased spend among brands on marketing technology tools is usurping budget from traditional media.

Zenith believes much of this shifting spend is a result of innovations led by those ad techs themselves, which have massively streamlined the process of creating, targeting, optimising and measuring ads on their platforms.

In July this year, for example, Google released a suite of machine learning-based ad tools which helped to optimise ad creative and placement based on the browsing habits on users across its search engine and YouTube, as well as introducing new metrics such as offline store visits.

At present, though, the report notes that in terms of paid search, there is still a lack of opportunities for tapping into the growing prevalence of smart voice assistants like Amazon Alexa and Google Home, despite being touted a promising new channel.

Zenith expects that search platforms will eventually find a way to make paid search work with voice to realise further potential; in the meantime, the company’s head of forecasting and director of global intelligence, Jonathan Barnard, urged brands to focus more on content and SEO to secure first-place results for their keywords.

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