Advertising Spend to Rise by 1.1% in 2020

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Advertising
Article source: Performancein

Advertising spend for the year is expected to grow by 1.1% (revised from 0.8%) and growth upwardly revised to 0.7% (from 0.4%) for 2019. Furthermore, digital ad spend in 2020 is expected to rise by 1.1%, and steadily increase to 1.3% by the end of the forecast period.

These findings are from the IPA Bellwether quarter two (Q2) 2018 report, which is a quarterly survey of marketing budgets.

With budgets advancing towards various marketing channels, the latest survey data revealed a noticeable drive towards digital-based advertising during the Q2.

“The report points to another significant surge towards digital-advertising. This is not because digital-advertising has suddenly become more effective than more traditional advertising mediums, but because basic digital viewability metrics allow marketers to better show their workings,” said Carl Erik Kjærsgaard, CEO and co-founder of Blackwood Seven.

Advancing channels

The net balance of firms reporting upward revisions to internet marketing budgets rose to a level that matched Q2 2017’s nine-and-a-half year peak (+22.7%). Within the broad internet category, panellists increased spending plans for SEO marketing by +11.0%).

“Whilst it is pleasing that internet ad spend is driving growth, we as an industry need to ensure that the dividends are being spread out to platforms providing quality content and not only funnelled into the tech giants,” commented Eric Visser, CEO and founder of JustPremium.

Contrastingly, mobile marketing budgets were generally unchanged (-0.7%) over the latest survey quarter.

“With mobile advertising expected to take 30.5% of global ad spending by 2020, we are remaining optimistic and confident that mobile spend will pick up pace as we fall into the next quarter,” said Ruth Manielevitch, director of business development EMEA at Taptica.

Meanwhile, main media advertising, which includes big-ticket campaigns related to TV, radio, and cinema, showed more forceful spending plans by marketing executives, following downward budget revisions in the first quarter. The net balance was positive overall (+4.9%).

“There are two driving factors behind this growth; firstly the ever-increasing quality of what we are able to produce in online media and secondly, the appeal of clear metrics – such as viewability and in-view time – which better allow marketers to prove the ROI back to the business,” added Visser.

Elsewhere, budgets available for direct marketing, which includes email and telemarketing, were revised lower (-3.2%) in the second quarter amid recent GDPR changes.

Ongoing uncertainty around Brexit continues to remain a primary risk for many panelists, but we expect that ad spend will be used in defensive manners due to competitive pressures. Beyond the next two years, however, the forecasts are unchanged, reflecting the Bellwether’s view that underlying growth will support stronger consumer spending.

“With difficult macroeconomic conditions, the introduction of GDPR and the never-ending saga of Brexit rolling on, it’s remarkable to see advertising on course for steady growth,” concluded Visser.

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