U.S. Digital media ad spending is anticipated to exceed TV ad spending according to recent forecast from Magna Global.
Magna Global’s director of global forecasting Vincent Letang further explains that the digital media ad revenue will surpass TV ad income in U.S. earlier than expected with $66 billion in revenue. Relative to this fact, it is also reported that digital media is now viewed as the largest media type in several Western European countries and in China.
Advertisers have been withdrawing their investment in most types of traditional media categories including television and choose to invest in digital ad spending in search ads, social and video formats to keep up with the changing consumer consumption habits.
“Advertisers also expect to save on their overall ad spending as they shift their budgets to digital media,” Mr. Letang said. TV promotion sales have had a tough year because of sliding appraisals, weaker pricing and year-ago comparisons.
National TV sales in the U.S. fell 3.4% in the second quarter – the worst quarterly performance for TV since 2009 – though this was affected by the year-ago impact of the FIFA World Cup tournament on Spanish network ad sales. For the initial six months of the year, national TV sales were down 1.4%, barring political and Olympic advertisement spending. Magna Global projects national TV ad sales to decrease 0.4% for the full year.
Magna Global now expects U.S. ad revenues to grow 2.2% to $165 billion this year, barring non-recurring revenue from political and Olympic advertisement disbursing, down from its June forecast of 3% growth. Mr. Letang emphasizes that ad income progress in the second half of 2015 is projected to toll superior to the first half’s 1.6% development. Digital media advertisement sales, drove by social and video formats, were up 16% in the initial six months of the year and are expected upon to increase at a comparable rate for the entire year.
Domestic ad spending is anticipated to accelerate to 3.3% growth for 2016, excluding political and Olympic ad spending, however that is below Magna Global’s earlier projection of 3.8% growth.
Out-of-home ad spending is expected to grow 3.3% for all of the 2015 compared to a 3.8% contraction for ad sales across all customary media types this year as it continues to take advantage from new digital screens and strong growth in the small sector of cinema advertising.