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Facebook and Google ad sales to top Global TV for second year running

The world’s biggest brands are set to spend more on ads with tech giants Facebook and Google than the entire global TV sector this year, according to a report.

Advertising revenue for the ‘duopoly’ of Alphabet parent Google and Facebook, which are both traded stocks, is forecast to hit $231.9bn this year, having topped the TV total for the first time in 2019.

This is accounts for 35 cents in every dollar spent on advertising, by some of the world’s biggest advertisers such as General Motors, Coca-Cola, Walt Disney (which owns the Star Wars franchise) and Procter & Gamble.

By comparison TV’s traditional powerhouse media pull is set to lift 2.5% to $192bn, helped by the US presidential election in November and the Summer Olympic Games in Tokyo starting in July.

Overall, global advertising spend is set to rise by 7.1% to $660bn this year, buoyed by 13.2% growth in online spending. However, all traditional media combined, are expected to post a record 1.5% growth to $324.2bn, its first rise since 2011, according to marketing agency Warc’s Global Ad Trends report.

 

Digital ad spending to top traditional media for the first time this year

The report projects Alphabet’s ad income to increase by 10.5 per cent year over year to $149bn this year, while Facebook’s ad revenue is set to surge 19% to $82.9bn.

Other major online giants are all projected to see ad revenues lift.  Amazon’s ad income is set to jump by 21.4% to $17.1bn, Twitter is forecast to lift by 9.2% to $3.3bn and estimates say Snap will leap by 34.1% to $2.3bn.

Digital’s share of global advertising is forecast to top half of all ad spending for the first time, account for a 50.9% share, or $335.4bn.

James McDonald, managing editor of Warc Data, said: “Internet ad growth has been far stronger than the state of the global economy would suggest, rising seven times faster on average since 2015. But, regulation aside, online platforms are bound by the law of large numbers, and revenue growth is easing for key players like Alphabet and Facebook.”

But McDonald added that a sustained and widespread coronavirus outbreak might hold back ad spend growth this year.

He said: “Advertising’s relationship with gross domestic product is strong, but a slowdown in economic output as a result of the virus will not necessarily translate into reduced advertising investment. If events such as the Tokyo Olympics and UEFA Euro 2020 tournament are postponed or cancelled, however, we would expect a notable impact.”

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Based in Saudi Arabia, Siraj has a strong understanding of and passion for accounting and finance. He has worked for international clients for many years on several projects related to the stock market, equity research and other business, accounting and finance related projects. Siraj is a published financial analyst on the world's leading websites including SeekingAlpha, TheStreet, MSN, and others.