Online growth to slow to 20 year low, can mail benefit?

direct mail tooAnother day, another prediction that digital will continue to gobble up marketing budgets, only the latest study – which forecasts that over half (52%) of global adspend will by splashed online by 2021 – comes with a sting in the tail.

While Zenith’s Advertising Expenditure Forecasts report is hardly unique – back in March, eMarketer claimed digital would break the 50% spend barrier this year – what is slightly different is that Zenith insists growth in online is slowing to levels not seen for nearly two decades.

Digital declined from 17% growth last year to 12% in the first half of this year and is forecast to drop to just 9% growth by 2021.

Zenith head of forecasting Jonathan Barnard said: “The point at which Internet advertising exceeds half of global adspend has been approaching for some time, but this is the first time it has appeared in our forecasts.

“2021 will be the first year of single-digit Internet adspend growth since 2001 – the year the dotcom bubble burst.”

According to the Zenith’s research, much of this growth is set to come from small businesses that spend their budgets on platforms with self-serving management tools, such as Google and Facebook, enabling them to launch niche but highly targeted campaigns.

On the other hand, the majority of big brands commit less than half of their budget to these platforms, opting instead for traditional media.

Zenith global brand president Matt James said: “The categories that have advanced the furthest in using modern digital channels are technology, media, finance and professional services. And, even within these, brands still rely on traditional media to create broad mass awareness and reinforce brand values.”

One industry source said: “If online spend is slowing, surely the direct mail industry should be stepping into the breach? There is enough research to show it works well, but, despite reports of ‘green shoots’, the big resurgence has yet to emerge. The question is, how much longer can brands risk missing out on the power of print?”

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