Dive Brief:

• Global online ad spend is expected to grow 4.7% in 2019, up from the 4% previously forecast in December 2018, according to Zenith's "Advertising Expenditure Forecasts." Online advertising grew 16% in 2018 to $246 billion, more than the 12% originally forecast, and it is projected to reach $329 billion by 2021 and account for 49% of all global ad spend.
• Online video and social media is driving much of the growth. Online video is forecast to grow by 19% by 2021, and social media by 14%. Digital display, encompassing video and social, will grow 13% a year, with paid search and classified ads growing at 7% per year. Out-of-home advertising is forecast to grow by $4.4 billion between 2018 and 2021, making it the fastest-growing "traditional" ad medium, thanks to the growth of digital screens and programmatic sales.
• The U.S. leads global ad spend, accounting for 37% of total spend. Zenith's forecast for U.S. ad spend this year increased to 5% from 2.9%. For Russia, the forecast increased to 8.2% from 7.1% and for France, to 4.7% from 3.7%. Small businesses make up a large part of the online ad growth, since Google and Facebook opened up self-serve tools for these advertisers to target their customer base, more accurately reflecting their contributions to local economies.

Dive Insight:

The Zenith report underscores marketers' growing investments in digital advertising formats, especially social media and online video. But the report also highlights how small businesses and challenger brands are competing for consumers' attention with more established brands, which may need to rework their digital strategies to compete. 

For digital challengers, combining digital and traditional offline formats may be the best approach for raising brand awareness. Social video offers wide reach and more precise targeting, but shorter exposures and more personalization may better capture consumers' short attention spans, per the report. Digital native brands are helping to bolster TV ad spend, for example, with linear TV advertising projected to grow by 0.7% a year through 2021. 

Zenith also emphasizes the growth of out-of-home (OOH) advertising, which is surpassing TV's predicted growth. This aligns with recent data released by the Out of Home Advertising Association of America showing OOH ad spend grew 4.5% in 2018 to reach $8 billion, a record high for the format, which has seen 35 consecutive quarters of growth. Digital OOH accounted for 29% of the spend. 

The forecast builds on an already robust advertising landscape. The Interactive Advertising Bureau called 2018 a "landmark year" for digital advertising, driven by OOH and direct-to-consumer markets. Marketers spent $75.8 billion on digital during the first three quarters of 2018, 22% more than the same period in 2017.