Advertising dollars are still flowing into Google parent Alphabet Inc. (NASDAQ:GOOG, NASDAQ:GOOGL) and Facebook Inc. (NASDAQ:FB) despite a backlash against the tech giants from some big marketers.
Magna, a division of Interpublic Group of Companies, released a report Monday that showed ad spend is set for monster growth this year. Magna predicts global ad revenue will leap 6.4% to US$551bn this year, up from an earlier projection of 5.2% growth.
The firm attributed the revision to Facebook and Google, noting that the tech-heavy hitters have collectively grown revenue by 31% which is “pretty amazing.”
The Wall Street Journal parsed the report and said that while “some brands have pulled back” in spending on Google and Facebook due to issues that range from “brand safety to performance challenges,” ad buys from small and local businesses are more than making up for the cuts.
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“The thing really that we revise up for is digital,” Vincent Letang, executive vice president of global market intelligence at Magna, told the Journal. Growth from small and local businesses was “bigger than we thought.”
Digital accounts for nearly half of the projected 2018 growth, Magna said.
Global digital advertising sales, including display, video, search and social, will grow 16% this year to US$250bn, slowing slightly from 18% growth in 2017, Magna predicts.
More than 60% of digital ad sales are currently generated by impressions and clicks on mobile devices, the company added.
The report also broke out regional ad sales indicating total US ad sales will grow by 6.4% in 2018 to US$207bn. This is a leap from Magna’s previously projected 5.5% growth for the US market.