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eMarketer | September 13, 2016

US Digital Ad Spending to Surpass TV this Year

Digital will represent 37% of US total media ad spending

By: eMarketer

It’s no secret advertisers are flocking to digital at the expense of traditional formats. But the latest data shows the shift accelerating faster than expected in the US. According to eMarketer’s latest ad spending forecast, digital will overtake TV ad spending this year for the first time. eMarketer had forecast in March that the shift would not happen until next year.

By the end of this year, US digital ad spending will reach $72.09 billion, while TV spending will grow to $71.29 billion. That means digital will represent 36.8% of US total media ad spending, while TV will represent 36.4%.

“Digital advertising is not only pulling dollars from traditional media, but it’s also creating new advertising opportunities at the local and national level,” said eMarketer forecasting analyst Martín Utreras.

Importantly, TV ad spending is still growing. In fact, eMarketer increased its 2016 TV projections due to increased spending tied to the Olympics, presidential election and a strong scatter market.

The strong performance of the digital ad market is being driven by several factors, including, not surprisingly, mobile and video. Mobile ad spending will grow 45.0% this year to reach $45.95 billion. As it grows, it will represent an increasing share of overall ad spending. By 2019, mobile will represent more than a third of total media ad spending in the US. Google is the undisputed king of mobile and will remain so for the foreseeable future. Google will capture 32.0% of the mobile ad market—its closest rival Facebook capturing 22.1% this year.

Not only will video ad spending continue to grow by double-digit percentages, its share of total digital spending will increase as well. This year, video ad spending will reach $10.30 billion, representing 14.3% of total digital spending. That figure will climb to 15.1% by next year.

“Programmatic is making a lot of the inventory more accessible, not just to larger marketers but also to local and smaller advertisers,” said Utreras. “At the same time, the focus of the industry on viewability, native and better measurement is driving more dollars and delivering better results.”

Display will continue to be the top format for digital ad spending through 2020. Display spending will reach $34.56 billion this year, slightly ahead of search’s $33.28 billion. Facebook will capture the vast majority of display spending, taking in $11.93 billion this year, 34.5% of total display spending in the US. Google is a distant second, with $4.79 billion or a 13.8% share.

Originally posted on eMarketer