Home Platforms Magna: Global Ad Spend Is Set For Monster Growth In 2018 (Google, Facebook: ‘We’ll Take That, Thanks’)

Magna: Global Ad Spend Is Set For Monster Growth In 2018 (Google, Facebook: ‘We’ll Take That, Thanks’)

SHARE:

The global ad market is set to grow even faster than forecasted. Why? It’s the duopoly, folks.

In a report released Monday, IPG-owned Magna Global significantly revised its global ad market growth projection from 5.2% to 6.4%, which translates to $551 billion in global ad spend. In Q1, Google and Facebook’s collective ad revenue increased an eye-popping 31% globally – reaching $26.6 billion and $11.8 billion, respectively.

Magna predicts overall digital ad spend will hit $250 billion this year – accounting for 45% of global ad revenue – with mobile on track to make up 62% of the total.

In the US, the ad marketplace will grow by 8%. Digital ad sales will increase 15% to reach $106 billion and more than half (52%) of all ad dollars.

The seemingly unstoppable growth of digital ad spend was surprising to Vincent Letang, Magna’s EVP of global market intelligence.

Anything that reaches scale has to plateau sometime, but digital still hasn’t reached that inflection point, Letang said.

Brand safety concerns and anxiety over data scandals aren’t having any discernible impact on digital growth either, although some big brands, particularly in CPG, entertainment, QSR and pharma, are putting some money back into the stability of television.

But big brands are less responsible for the duopoly’s gains than the millions of small and medium-sized local marketers spending on social and search, Letang said. It may be a few promoted posts here and there, but when multiplied by millions, the numbers add up.

On its last earnings call in April, Facebook touted the accessibility of its ad platform. Many of its 6 million advertisers are SMBs.

“In the past, they might have been doing things like the Yellow Pages or flyers or direct mail, and some of them were probably doing nothing at all, and now they’re using Facebook and Google,” Letang said. “These are tools that keep creating new marketing opportunities that simply didn’t exist before.”

But the picture is somewhat less rosy for traditional media.

Subscribe

AdExchanger Daily

Get our editors’ roundup delivered to your inbox every weekday.

Although TV is hanging on thanks to large brand stalwarts and cyclical spending on major events, such as the World Cup and US midterm elections, without those tent poles, growth for 2018 would likely be 5.5% – the same as last year. In other words: flat.

Flat growth must sound pretty good, though, to channels such as print and radio. Global print ad sales are set to decrease by 17% this year. Radio is on tap to drop by nearly 4%. Out-of-home is growing, but it’s only a bright-ish spot. The sector will scooch up 2% mainly due to the digitization of OOH.

But television and broadcast networks have a trump card to play. Addressable TV campaigns are projected to bring in $800 million this year, up 27%. That’s not to say there isn’t competition, though. The OTT upstarts, including YouTube, Hulu, Roku and others, are forecasted to generate more than $2 billion in ad impressions on TV screens in 2018 – up 40%.

“It’s the television set making a comeback with familiar TV content on a familiar screen,” Letang said. “The difference is it’s served digitally – in many cases programmatically – and it’s starting to be targeted.”

Speaking of programmatic, ad spend in the sector is still growing at a rapid clip in the US, where it represents 62% of total display ad spend ($12 billion), which Magna predicts will hit 78% by 2021.

Must Read

Comic: TFW Disney+ Goes AVOD

Disney Expands Its Audience Graph And Clean Room Tech Beyond The US

Disney expands its audience graph and clean room tech to Latin America, marking the first time it will be available outside the US. The announcement precedes this week’s launch of Disney+ with ads in Latin America.

Advertible Makes Its Case To SSPs For Running Native Channel Extensions

Companies like TripleLift that created the programmatic native category are now in their awkward tween years. Cue Advertible, a “native-as-a-service” programmatic vendor, as put by co-founder and CEO Tom Anderson.

Mozilla acquires Anonym

Mozilla Acquires Anonym, A Privacy Tech Startup Founded By Two Top Former Meta Execs

Two years after leaving Meta to launch their own privacy-focused ad measurement startup in 2022, Graham Mudd and Brad Smallwood have sold their company to Mozilla.

Privacy! Commerce! Connected TV! Read all about it. Subscribe to AdExchanger Newsletters

Nope, We Haven’t Hit Peak Retail Media Yet

The move from in-store to digital shopper marketing continues, as United Airlines, Costco, PayPal, Chase and Expedia make new retail media plays. Plus: what the DSP Madhive saw in advertising sales software company Frequence.

Comic: Ad-ception

The New York Times And Instacart Integrate For Shoppable Recipes

The New York Times and Instacart are partnering for shoppable recipe videos.

Experian Enters The Third-Party Data Onboarding Business

Experian entered the third-party data onboarder market on Tuesday with a new product based on its Tapad acquisition.