Digital spend booming, propelled by small business: Zenith

Media agency Zenith has released a report which shows internet ad spend is continuing to grow, faster than previously anticipated, despite a predicted downturn.

Locally, the report also predicted the banks’ foray back into advertising, combined with increased government ad spend, would prop up the market.


The Zenith Advertising Expenditure Forecast shows display advertising is still showing strong growth, and will continue to do so, showing clear signs of health in Australia particularly.

Digital ad spend is predicted to exceed 60% of the total in Australia by 2021. This is despite a degree of slow-down, particularly across search.

On a global scale, internet advertising performed stronger than expected, driving 4.7% growth in total global ad spend in 2019, substantially stronger than the 4.0% forecast made in December 2018.

Zenith forecasts 4.6% growth in both 2020 and 2021, increasing on the previous forecasts of 4.2% and 4.1% respectively.

The forecasts have been increased after ad spend in 2018 exceeded expectations, growing 16% over the year to create a total internet ad spend of US$246bn. By 2021, Zenith predicts that spend will be at US$329bn.

Online video and social media are behind the growth, with both channels expected to grow by 19% and 14% a year respectively to 2021. As a total, display advertising is predicted to grow by 13%, surging ahead of paid search and classified which is predicted to grow by 7% a year.

New ad market money is entering the market from digital challengers who are using venture capital to fund digital-focused awareness campaigns, the report said. Through using scaled exposure to build market share, these challengers are employing different strategies online compared to those that would be used in traditional media. This is where video largely comes into play, with precise targeting and high-impact creative, according to the report.

This money is also going into traditional media, with digital-native brands helping to prop up global television ad spend. Despite rapid declines in viewers, the spending here is staying roughly stable with Zenith forecasting television advertising to grow by 0.7% a year to 2021.

Global growth is currently being led by the US, Russia and France. Zenith has increased its growth forecasts for 2019 from 2.9% to 5.0%, while Russia increased from 7.1% to 8.2%, and France went from 3.7% to 4.7%.

The boost in internet advertising is largely being driven by small businesses, with platforms such as Google and Facebook making it easy for them to create their own advertising quickly and manage it effectively, the report said. This, despite Facebook’s privacy scandals and blowback from the Christchurch terror attack.

Elizabeth Baker, Sydney head of investment for Zenith said the advertising market shouldn’t be worried yet, with all signs pointing towards continued growth in Australia.

Baker expects government spending to drive Australia’s ad industry in 2019

“All things considered, from an advertiser perspective we anticipate any potential leap towards austerity being countered by the fight to maintain market share, particularly in the retail and auto sectors. Government advertising has also started to enter the market and will be felt across TV and radio in particular,” said Baker.

“Similarly, domestic banks will have to re-enter the advertising market later in the year as they seek to regain trust and mitigate customer switching in the wake of the Royal Commission. Overall, Australian ad spend is likely to grow to the tune of around three per cent every year until 2021.”


Get the latest media and marketing industry news (and views) direct to your inbox.

Sign up to the free Mumbrella newsletter now.



Sign up to our free daily update to get the latest in media and marketing.