Digital to Beat TV in Ad Spend by 2018

Eden Ames
American Marketing Association
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Key Takeaways

What? TV growth is slowing dramatically in a lot of major markets.

So what? Digital advertising expenditures are expected to soon surpass TV.

Now what? Marketers must optimize digital strategies to counter decline in traditional advertising.


“TV global growth is diminishing. In most major developed markets, TV growth is slowing and in some cases stagnating,” says Vincent Letang, the head of global forecasting at Magna Global, reports The New York Times.

TV ad sales are projected to continue falling in 2016. Apart from the recession year, global sales for television ads will decrease for the first time, according to the Interpublic Group’s Magna Global


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Where is the money going? Digital advertising, say sources, leading to the inevitable surpassing of digital ad spending over TV. According to ZenithOptimedia, mobile ads are expected to account for half of Internet advertising by 2018, marking the first time digital surpasses desktop ads. Magna Global predicts digital ad spending will grow by 17.2% this year, reaching nearly $160 billion. By 2016, an anticipated growth of 13.5% would make digital the largest advertising category by the end of 2017.


The prospect that online and mobile platforms would capture more ad dollars than TV became inevitable in the last several years. Until recently, advertisers were dipping into their print budgets to feed their digital ad purchases. But ad dollars are now flowing from TV to digital, said Jonathan Barnard, the head of forecasting for ZenithOptimedia. -The New York Times

As traditional advertising falls behind, pressure on marketers to optimize digital strategies increases. Marketers must be prepared to deal with the implications of a transition from TV to digital advertising, thinking in terms of how to advertise with digital platforms first and foremost.

Over all, Magna Global predicts that global ad spending will grow by 4.6 percent, to $526 billion in 2016, and ZenithOptimedia sees an increase of 4.7 percent, to $579 billion. WPP’s GroupM cut its growth estimate to 4.5 percent, from 4.8 percent, to $520 billion. -The New York Times
 

Author Bio:

 
Eden Ames
Eden Ames is a Digital Content Producer for the American Marketing Association. You can reach her at eames@ama.org
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