It is a new day in media as the U.S. advertising market is expected to hit a record high in 2016. The projected spending of $178 billion will be the most spent on advertising, and expected to be the fastest growth rate since 2010 at 5.8%. This comes at a time when the projected rate was at 4.9% prior to the start of 2016. Not only has overall ad spending increased, both TV and digital media ad spending saw significant increases this year. Compared to last year when the market fell 3.5% from 2014, U.S. TV spending rate will rise 6.6% to $68 billion this year. This has a lot to do with the Rio Olympics and U.S. presidential election, as the projected TV advertising spending in 2017 will fall to a rate of 4.5% or only $65 billion. Meanwhile, digital media is continuing its surge and will surpass TV ad spending for the first time next year.
Looking ahead to 2017, TV ad spending will reach 35.8% of total media, while digital ad spending will be at 38.4%. The projected rate will see digital advertising spending overtake TV for the first time, and it will likely stay that way for some time. While TV advertising is still growing, sustaining that growth will be challenging. Martin Utreras, eMarketer’s forecasting analyst, says, “Digital advertising is not only pulling dollars from traditional media, but it’s also creating new opportunities at the local and national level.” The forecasters at eMarketers estimate TV to grow about 2% in terms of dollars spent, but decline when it comes to percentage of total media. The expectations for TV growth are positive, as there will always be popular TV shows and live sporting events, among other things, but the dollars are clearly being directed towards digital.
It is obvious why digital ad spending is taking over, as advertisers have numerous options such as Hulu and other streaming platforms. There is also the rise in mobile ad spending which will make up $45.95 billion this year and is projected to account for one-third of total ad costs in the U.S. by 2019. With 385,000 people cancelling their standard TV packages in 2015, digital advertising can only keep on rising. Nevertheless, TV is still doing well and smaller companies may benefit from this as traditional advertising may start to become cheaper due to demand not solely directed at TV advertising.
The advertising industry is booming, not only as the two biggest areas of advertising are seeing growth but the smaller advertising platforms are as well, with in-theater advertising and out-of-home growing to 5.1% and 3.3% respectively. The total spent on advertising shows that the average ad spent per person next year is expected to be $553.70 which is up $60 from 2012. Despite some declines in newspapers, magazine, and radio, overall the industry is showing that vendors are willing to adapt and spend where it’s necessary to reach consumers.