Zenith forecasts global ad spend to grow by 4.6% this year to US$639bn, marginally down from its 4.7% growth forecast in March.

The Publicis-owned company said global internet advertising will hit 52% in 2021, up from 47% this year. However, the growth rate is softening as internet advertising matures. Zenith predicts 12% growth for internet advertising this year, down from 17% last year. By 2021, it predicts 9% growth for internet advertising, suggesting it is starting to converge with the growth rate of the market as a whole.

Much of the growth in internet advertising is driven by smaller businesses, who spend all of their budgets on digital ads, skewing the picture. Globally, big brands are investing large sums in internet advertising, but the majority are still spending most of their budget in traditional media, the firm suggests.

In Australia, Zenith predicts 3% growth this year, to AU$17.2bn, in line with its March forecast. But the firm warns of steeper than predicted declines in TV revenues, as marketers divert budgets to internet advertising.

“Australia is ahead of curve in relation to digital share of ad spend, achieving the 50% level back in 2017, and will edge closer to the 60% share level over the next few years," said Elizabeth Baker, Zenith’s head of Investment, Sydney.

"The original catalyst for digital spend growth was the transition of print classifieds into online. Today, the fastest growing channel is video which now represents 8% of the total ad market. The mobile platform is also a growing category and now accounts for a quarter of all advertising spend. We anticipate that this will only increase with the launch of 5G in Australia sometime later this year.”