July 22, 2019
Internet advertising growth is slowing. Here’s what’s changing … and why

Read this sentence slowly: pre-movie ads at the theater will grow faster than internet advertising next year.

You got that right.

Ads shown for 10-20 minutes to a paying audience waiting for the real show to start will grow faster than the fastest, most modern, most digital advertising ecosystem ever created. The most annoying part of going to a theater is now also the fastest-growing sector in paid marketing.

But this shouldn’t be a shock, at least on one hand.

Not because cinema ads are shockingly effective — 8X better than TV, according to one study — and not because more people globally are going to movies than ever before. But it shouldn’t be a shock primarily because nothing can grow at huge rates forever.

Internet advertising has just gotten too big to grow at huge multiples.

Share of global adspend by medium, by Zenith

“2021 will be the first year of single-digit internet adspend growth since 2001, the year the dotcom bubble burst,” says Jonathan Barnard, Head of Forecasting at Zenith, a large digital agency.

The good news for digital advertising advocates?

“Internet advertising will account for 52% of global advertising expenditure in 2021, exceeding the 50% mark for the first time,” says Zenith. In addition, pockets of digital advertising such as video and social are still growing at double digits: 18% and 17%, respectively.

What’s not growing, however, is interesting.

While traditional newspaper (-5.3%) and magazine advertising (-7.1%) will continue to decline, traditional outdoor advertising will grow 4.5%. Radio advertising will be basically stable, at 1%. And cinema advertising will jump almost 12%, driven largely by increasing movie-going audiences in China.

What we’re seeing is the dominance of internet, especially on mobile.

But what we’re also seeing is that as this medium gets saturated, marketers are looking elsewhere for fraud-free and less-noisy advertising environments. And with TV, newspapers, radio, and magazines projected to collectively make up 47.5% of the advertising ecosystem in 20121, big brands are still turning to mass media to get achieve broad brand recognition.

Which means that large advertisers need diverse marketing solutions including mobile, web, and traditional media. And they need that data unified to understand their overall marketing effectiveness. (Interested to know how this works? Talk to us and get a quick demo.)

Global spending continues to rise, according to Zenith.

Advertising spend will grow 4.5% in 2019, hitting a global total of $639 billion. Half the growth will come in the U.S., which is still the biggest advertising marketing on the planet at a forecasted spend of $268 billion in 2021.

Next up?

China, at $96 billion, and Japan at $45 billion.

NEXT: see how marketing intelligence is changing brands’ and enterprises’ view of their marketing data.