Digital Ad Spending to Surpass TV Within Next Few Years

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According to a report recently released by Magna Global and summarized in an article for Ad Age, spending on digital advertisements should surpass spending on television-based ads by 2017.  In this year alone, Magna Global believes digital media will reach thirty percent of the market share globally in 2015, placing it distinctly on target to surpass television spending by the year 2017.  Specifically, over the course of 2014, ad revenue provided by digital media grew seventeen percent, to reach a total of one hundred and forty two billion dollars.  This is attributable to dedicated mobile campaigns and new social formats, according to Magna Global.  This figure is expected to grow and additional fifteen percent over the course of 2015.

Within the overall umbrella of digital advertising, paid search is the number one format for ads, holding nearly half of all global spending dollars.  Paid search is followed by display—which holds twenty one percent of the spending, social—composing twelve percent of spending, and finally video, with eight percent of funds spent globally.  From this, Magna Global predicts mobile ad spending will grow rapidly and represent a third of all digital revenues by 2016.

An increase in digital advertising isn’t the only factor that could lead to this platform outperforming television.  Mediocre spending was a theme for 2014, and Magna Global believes this will continue to be a trend, particularly in television.  TV revenue in the United States will decrease by nearly one and a half percent; alternatively digital media will increase fifteen and a half percent, reaching thirty one percent of the market share.  Generally speaking, spending in advertisements outside of the digital sector was down, based in several factors.  Bad weather at the start of the year led to severe hits for retailers, restaurants and automotive dealers.  As a result, the fact that digital advertising appears to be cheaper than other avenues became increasingly appealing to businesses.  These factors combined should result in increasing the loss already felt by TV revenue; in 2014, television ad revenue grew just shy of five percent, far below Magna Global’s anticipated growth of eight and a half percent.

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