Online ad growth seen slowing in 2021 to levels since dotcom bubble burst

AGENCIES: Global advertising spend is expected to grow 4.6pc in 2019, a dip from previous estimates, with internet advertising seen slowing to single digits in 2021 for first since the dotcom bubble burst, industry forecaster Zenith said.

Zenith, owned by French advertising group

Publicis, said in a report published on Monday that internet advertising would
account for 52% of global advertising expenditure in 2021, surpassing the 50pc mark
for the first time.

The report comes during the time when

advertising companies including market leader WPP Plc have seen clients
switching to using online platforms such as Google and Facebook to reach
consumers.

Big advertising groups sometimes been viewed as

behind the curve in terms of digital strategy. Former WPP boss Martin Sorrell’s
S4 Capital bought San Francisco-based programmatic ad firm MightyHive in
December, with a strategy to create a pure play in the world of digital media
and advertising.

Currently 47pc of total global advertising

spend accounts for internet advertising, according to Zenith, up from 44pc last
year but the growth rate is expected to slow down as the internet ad market
matures.

“2021 will be the first year of single-digit

internet adspend growth since 2001, the year the dotcom bubble burst,” Jonathan
Barnard, Head of Forecasting at Zenith said.

However, while big brands still depend heavily

on traditional media, local and small businesses spend all their budgets on
platforms such as Google and Facebook . In contrast, large advertisers devote
considerably less than half their budgets to online advertising on average.

Global overall advertising spending is expected

to rise by $28 billion in 2019, Zenith said, adding that about half the growth
would be from the United States, helped by rapid growth in internet
advertising.

China will be the next biggest contributor to growth,

followed by Britain and India, Zenith said.