Ad Age creates and shares an exclusive quarterly trend report with Ad Age Insider subscribers. As we reach the end of the year, Studio 30 contributing writer Michael Applebaum looked back at his 2019 forecast from last January. Already an Insider? Instantly download the trend report here. Or learn more about Ad Age membership levels and benefits here. Check back here next month for our 2020 forecast.
Ad spending growth hits the pause button. Facebook, Google and other tech giants find themselves in more hot water. Marketers struggle with stricter government regulations regarding data privacy. These are just a few of the predictions that Ad Age Studio 30 made in January in its annual trend report, “2019 Forecast: The Year Ahead.”
So which of those prognostications came to pass—and which were off the mark? You be the judge. Here are five major predictions from last January's trend report and the events that followed.
Prediction: Global ad spending will see slower growth due to a lack of cyclical events and general economic uncertainty. The three major ad forecasters predict an average increase in spending of about 4 percent, citing potential weakness in the global economy due to factors including Chinese growth and looming trade wars.
What happened: Ad spending forecasts were generally on target. According to a report from GroupM, global advertising (excluding U.S. political advertising) will end this year with 4.8 percent growth, down from 5.7 percent in 2018. Throughout 2019, U.S. imposed tariffs and trade talks with China temporarily blunted markets and hampered some sectors of the U.S. economy, but conditions generally rebounded. Forecasters are now weighing the impact of spending for cyclical events (Olympics, the U.S. election) in 2020.
Prediction: Digital ad growth will remain strong, but is expected to slow into the single digits by 2021.
What happened: The slowdown has begun, but is perhaps not as pronounced as some forecasters were expecting. According to a new report from Magna, U.S. spending on digital advertising is expected to grow 16.1 percent this year (down slightly from 17 percent in 2018) and 10.9 percent in 2020. And eMarketer now says that the growth of global digital spending will remain in double digits for the next three years, eventually sliding from 10 percent in 2022 to 8 percent in 2023.
Prediction: Amazon will siphon more ad dollars from Facebook and Google, potentially threatening to break up the digital ad duopoly.
What happened: Amazon remains a distant third in overall digital ad revenues behind Google and Facebook, but its search advertising business is a growing threat. According to a recent report from eMarketer, Google’s $40.3 billion in search ad revenues equals a 73.1 percent share of the U.S. search ad market, while Amazon is expected to grow nearly 30 percent to $7.09 billion in 2019, reaching 12.9 percent of market share. By 2021, Amazon’s share is expected to grow to 15.9 percent, while Google’s share is expected to shrink to 70.5 percent. Ad Age recently reported on the five trends that have the potential to derail the Facebook-Google duopoly.
Prediction: Mark Zuckerberg and other tech titans will face intense public scrutiny for their growing socioeconomic influence.
What happened: During a congressional hearing in October, by the House Committee on Financial Services grilled Facebook CEO Zuckerberg regarding the ethics of the company’s planned cryptocurrency, Libra, as well as its moral obligation to fact-check political ads. “We believe that, in a democracy, it is important that people see for themselves what politicians are saying,” Zuckerberg countered. Facebook was quickly perceived as the odd man out: Twitter announced later that month it was banning all political ads ahead of the 2020 election. In November, Google said it would no longer allow advertisers to target people based on whether they are registered voters, their political party or their record of support for specific candidates or issues.
Prediction: Stricter government rules for data privacy will cause growing headaches for marketers, and particularly for programmatic advertisers.
What happened: The jury is still out on this one. Some experts continue to argue that laws including General Data Protection Regulation (GDPR) in Europe and the California Consumer Privacy Act (CCPA) have exerted a permanent restraint on a company’s ability to share user data with marketers, forcing brands to rely more on first-party data and creating gaps in audience addressability and attribution targeting models. But others say that any data-sharing policy changes will not materially affect the marketplace or consumer experience. As one expert told the ad-tech news outlet ExchangeWire earlier this month, “The ‘GDPR apocalypse’ will be a dud, and will instead be a prompt for evolution. Welcome to a smarter, safer, more responsible ad tech.”