The tipping point is coming: internet ad formats are set to account for over half of all media spend worldwide by next year if the current trajectory is maintained, WARC’s Global Ad Trends report reveals.

In eight major markets, including the three largest, internet advertising already takes the majority of media dollars. The $107.5 billion spent on internet ads in America made it the dominant medium for the first time last year, while the balance tipped in China and the UK during 2016.

Across WARC’s 12 key markets – Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, Russia, the UK and the US – internet is expected to account for over half of media spend for the first time this year, drawing 52.7% of combined media spend.

It has been a long time coming. “When the Dotcom bubble burst at the turn of the century, internet advertising accounted for three cents in every ad dollar; two decades later, it will take the lion’s share,” stated James McDonald, Managing Editor, WARC Data, who authored the report.

“While the first wave of internet growth was driven by banner ads and search keywords on desktop computers, the second phase has been propelled by social media advertising delivered on mobile devices.”

As mobile phones have grown to near-ubiquity across the world, ever more information has become accessible. McDonald explains that these data have allowed the proliferation of programmatic ad trading, which has underpinned the internet’s dizzying growth.

WARC’s research highlights three trends behind this growth:

Internet spend has grown 5x faster than traditional media

According to WARC forecasts, when indexed, internet adspend’s growth to an expected $298.1 billion this year will represent a rate of expansion that is five times faster than investment in non-internet media since 2010. In that time, 76.6% (or $228.3 billion) of online ad market value will have been created.

And internet spend is also growing faster than its user base. Compared to 2010, in which advertisers spent $35.43 per internet user, the current rate has now more than doubled to $73.91. Between WARC’s 12 key markets, however, this rate varies wildly from the low (India: $2.63) to the extremely high (US: $491.50).

Mobile is the undisputed king

Now the primary ad channel, mobile will account for 95% of internet ad growth, such that the terms internet and mobile are nearly synonymous. Mobile adspend surpassed that for other internet channels (including desktop, tablet and connected TVs) combined for the first time in 2018, and this year mobile ads are expected to bring in 58.8% of all internet spend, equivalent to $175.3 billion. Among WARC’s key markets, mobile is expected to overtake TV in absolute terms across this year.

Display formats contribute the most to growth

Display, including banner ads, rich media, advertorial and sponsorship, online video and social media (among others) are expected to draw 45.1% ($118.5bn) of internet advertising spend across 12 key markets. These formats, combined, have accounted for over half of internet growth since 2016.

Within online display, half of this investment growth has come from social since 2015, and among the world's three largest markets (the US, China and the UK), 47.7% ($38.8bn) of display adspend went towards social media ads last year, up from 29.2% in 2014. In the US, social’s concentration is particularly acute: 83.4% of social spend goes to Facebook, up from 79.9% last year.

Online video is never far from investment interest, and this report shows its increasing importance, with its contribution to online display growth consistently over 33% since 2015. This year, video content is expected to draw one in three dollars from spend in WARC’s 12 key markets.

Sourced from WARC