From 44% in 2018, Zenith predicts internet spending will hit 47% of all ad expenditure this year and 52% in 2021.
The figures tally with WARC's assesment of the drivers of online growth, published May, though the report concluded that the tipping point will happen next year.
Zenith believes that, over the next two years, the growth rate of internet spending will drop significantly as the market matures, from 17% in 2018 to 12% this year and 9% in 2021 – the first year of single-digit internet adspend growth since 2001 when the dotcom bubble burst.
The growth rate of the internet ad market is starting to converge with the growth rate of the market as a whole, Zenith noted.
It further observed that much of the growth in internet adspend has come from small, local businesses that spend all their budgets on platforms like Google and Facebook – which offer simple, self-serve tools to manage campaigns, and highly targeted audiences – and this has skewed the overall picture.
Big brands, on the other hand, typically allocate less than half their budget to the internet and continue to spend most of it in traditional media.
“The categories that have advanced the furthest in using modern digital channels are technology, media, finance and professional services,” said Matt James, Zenith’s Global Brand President.
“And even within these, brands still rely on traditional media to create broad mass awareness and reinforce brand values.”
Within the internet category, spending has been driven by online video and social media, which are expected to grow at average rates of 18% and 17% a year, respectively, to 2021, helped by technical factors like faster connection speeds, targeting and delivery alongside investment in content.
The growth rate of paid search, meanwhile, is set to slow to 7% in 2021, while online classifieds, which are starting to lose out to other digital channels and free alternatives, will actually shrink 1.6% that year.
Broadcast television ad revenues are also predicted to shrink every year from now to 2021, falling from US$184bn in 2018 to US$180bn in 2021, and print remains on its long-term downward path.
Radio, however, is increasing its ad revenue by 1% annually, and the spread of digital OOH networks is contributing to a 4% annual growth in that channel.
Global adspend is forecast to increase by US$28bn this year, with almost half (US$13bn) coming from the US; China will be the next biggest contributor to growth, adding US$4bn in extra adspend, followed by the UK and India at US$1bn each.
Sourced from Zenith; additional content by WARC staff