Online advertising is beating expectations in 2019 and has been credited for boosting total global advertising spending by a projected 4.7 percent this year, ahead of expectations that had placed the worldwide annual growth rate at four percent. Zenith Media, part of advertising and public relations firm Publicis Groupe, in its Advertising Expenditures Forecasts report, projects 4.6 percent growth in both 2020 and 2021, ahead of previous forecasts of 4.2 percent and 4.1 percent growth, respectively.

“Internet advertising will exceed a quarter of a trillion dollars for the first time this year,” says Jonathan Barnard, Zenith’s head of forecasting and director of global intelligence. “The speed of internet ad spend growth continues to surprise us, as small businesses and digital challengers provoke established brands to up their game.”

Zenith’s last estimate, published in December 2018, originally set internet advertising spending for 2018 as up 12 percent for the year, but the media researcher has since revised last year’s growth rate to 16 percent. In dollars spent, it has increased its estimate of the internet advertising spending total in 2018 from $231 billion to $246 billion, leading Zenith to expect faster growth for the next few years—an average of 10-percent growth a year to 2021, up from the previous forecast of nine percent. Zenith now expects internet advertising to reach $329 billion in 2021, and account for 49 percent of all global ad spending, up from its 47 percent forecast in December.

Internet advertising’s growth, Zenith reports, is being driven by online video and social media, which it expects to grow by 19 percent and 14 percent a year, respectively. Display advertising as a whole—which includes video and social online advertising as well as banners—is expected to grow 13 percent a year while paid search and classified advertising will lag behind with seven percent annual growth.

Zenith notes that small businesses account for a large share of the growth in internet advertising. The company notes, “Platforms like Google and Facebook have opened the ad market up to many small businesses for the first time, by offering simple self-serve tools to create ads and manage campaigns, and provide the localization and targeting they need to reach their limited potential customer base, converting customers effectively. Small business advertising is rising from a very low base, towards a share of the ad market that better reflects their contribution to the economy: in most countries small businesses contribute half or more of GDP and a larger share of employment. These businesses don’t need to use mass media to create wide awareness—indeed, their customer base is often so limited, by geography or special interest, that using mass media would be too wasteful.”