The Duopoly Is Expected to Outpace TV in Global Ad Revenues This Year

March 16, 2020

WARC Global Forecast Ad Spending Mar2020Global advertising investment for 2020 is expected to grow for both traditional and online media, but, not surprisingly, the biggest growth is expected to be seen in online media. Indeed, while traditional advertising spending is predicted to grow by 1.5% to reach $324.2 billion, forecast data from WARC Data shows that investment in online advertising will grow by 13.2%, reaching $335.4 billion this year.

It’s worth noting that this forecast may change given the rapidly spreading coronavirus pandemic and it’s yet-to-be-seen impact on the global economy.

The WARC forecast calls for online ads to account for more than half of the total global ad spend, which is estimated to total $659.6 billion.

More than one-third (35%) of that spend will go to the duopoly of Alphabet (including Google, YouTube and Google Network members) and Facebook (including Instagram, WhatsApp and Messenger). With a combined predicted ad spend of $231.9 billion this year, advertisers will  invest more in the duopoly than in TV ($192.6 billion).

Alphabet is expected to garner the largest portion of online ad dollars, with its ad revenues growing by 10.5% to total $149 billion. Almost three-quarters (72.4%) of those dollars will be invested in advertising on the Google search platform ($107.8 billion), with Google dominating the global search market to the tune of 77% ad spend share. YouTube, which in the US alone, accounts for one-fifth of the time OTT-capable households spend with streaming video services, is predicted to see a 22.1% lift in ad spend over 2019 to total $18.5 billion (29% of the total global online video ad spend.)

For its part, Facebook is forecast to see a 19% jump in ad revenue, reaching $82.9 billion. This growth is likely due in part to the growth of Instagram, which past data shows accounts for about one-fifth of Facebook ad spend (among Marin Software clients).

Separately, most traditional channels are still experiencing growth in advertising spend. The upcoming presidential election in the US and Summer Olympics are contributing factors to the expected 2.5% growth in TV ad revenues, though the status of the Games are in doubt.

Other traditional channels such as out of home (+5.9%), cinema (+5%) and radio (1.8%) are also expected to see growth. However, print ad revenues will see a decline, with newspapers down 5.9% and magazines down 5.6% from last year.

The US Ad Market Set to Grow

Advertising spending in the US was expected to total $238.2 billion, per WARC’s Global Ad Trends, February 2020 [download page]. This would put the US’ share of global ad spend at 36.1%, up from 35.6% in 2019 and 34.7% in 2018. It would also account for 95% of the total ad spend in North America.

The $238.2 billion represents a forecast 8.8% growth in US ad revenue, which would be considerably higher than the 4.7% growth witnessed in 2019. Globally, advertising spending is expected to rebound from last year’s low growth of 2.3% to reach 7.1% this year. Once again, though, these predictions are likely up for significant revision given unfolding global economic circumstances…

The full report can be downloaded here.

About the Data: Findings are based on an analysis of 96 markets included in WARC’s Adspend Database.

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