Digital Ad Spending Projected to Surpass TV by Greater Margin in 2017

Digital advertising in the U.S. is projected to surpass television spending in 2017 by an even greater margin than originally predicted, according to a new forecast from eMarketer.

The research firm had previously forecast that the milestone shift would take place next year, but now it is expecting digital to overtake TV by a wider margin. TV ad spending in the U.S. is expected to reach $72.01 billion, or 35.8% of total ad spending, next year, according to eMarketer. By comparison, U.S. digital ad spending is forecast to rise to $77.37 billion, or 38.4% of total ad spending in 2017.

As other categories continue to expand, television advertising in the U.S. is forecast to account for less than a third of total ad spending by 2020, according to eMarketer’s forecast.

There are varying estimates regarding when digital media will overtake the TV ad market. Magna Global, for example, expects digital ad spending to surpass TV ad spending in the U.S. this year.

The TV ad market has been challenged in recent years by sliding ratings, weaker pricing and the shift of viewers to new mobile and digital platforms. Despite a boost from the elections and the Olympic Games this year, eMarketer lowered its projections for TV ad spending growth to 2.5% for 2016 to $70.6 billion from its prior projection of 4.5% growth. Long term, eMarketer predicts TV ad spending will increase by about 2% a year.

In contrast, digital ad spending is projected to continue to increase at a robust rate fueled by mobile ad spending. EMarketer now expects digital ad spending to jump 15.4% this year to $68.82 billion. Mobile ad spending is expected to increase 38% in 2016 to $43.6 billion, representing nearly two-thirds of digital ad spending in the U.S.

EMarketer says its forecasts are based on an analysis of data from other research firms, government agencies, media firms and public companies, as well as interviews with publishers, ad buyers and agencies.

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