Online video and social media will be the fastest-growing advertising channels between 2019 and 2022, thanks mainly to continued increases in consumption on smartphones.
The amount of time people spend viewing online video has grown rapidly across the world, at an average rate of 32% a year between 2013 and 2018, boosted by improvements in display sizes and quality of mobile devices, faster mobile data connections, and the spread of connected TV sets. The average person will spend half as much time viewing online video as they spend viewing conventional television this year.
This fast-expanding supply of audiences is fuelling rapid growth in demand from advertisers, making online video the fastest-growing digital channel by advertising expenditure. We forecast online video adspend to grow by 16.5% a year on average between 2019 and 2022.
Social media advertising gives brands the opportunity to drive growth by using automated tools to optimise their campaigns for key business objectives. By using first-party data from their own websites to identify potential customers on social media, brands can convert consumers who are already on the path to purchase and target look-a-like audiences more effectively.
Social media advertising is growing at an average of 13.9% a year, and by the end of 2019 will overtake the combined expenditure on newspapers and magazines for the first time. We estimate that advertising expenditure on social media will reach US$83bn in 2019, while advertisers’ combined expenditure on newspapers and magazines will fall to US$69bn.
Social media and online video are overlapping sub-categories of internet display advertising, which also includes traditional banners and other forms of static ads. These are not growing nearly so quickly, dragging the overall growth rate of internet display to 11.6% a year. We expect internet display as a whole to overtake television to become the single largest advertising medium in 2020, attracting US$182bn in advertising expenditure.
Cinema will take third place among the fastest-growing channels, with 11.5% annual growth to 2022, driven by surging demand in China, but will still only account for 0.9% of global adspend in 2022.
Television will record zero growth over the next three years, as price inflation counterbalances the decline in global audiences. Prices are rising for printed newspapers and magazines as well, but not quickly enough to compensate for the persistent and rapid decline in readership. Newspaper adspend will shrink by 4.5% a year to 2022, and magazines will shrink by 8.1% a year.
