Digital advertising sales in the US will equal TV ad sales for the first time this year, with both generating $68 billion (a market share of 38.5% each), a new Magna US Advertising Revenue Forecasts report predicts.
Digital advertising sales will then accelerate to reach $105 billion by the end of the decade, accounting for 51% of the advertising market.
Media owner ad sales are expected to increase by 6.5% this year and by 1.5% in 2017 (see chart below). This will almost entirely be driven by digital media (up 15% to $68 billion) and television (up 7.4% to $68 billion), while print media and radio advertising sales will continue to decline (newspapers -11% to $12 billion, magazines -11% to $8 billion and radio -4% to $14bn).
Television revenue is being buoyed by the Rio Olympics and a record year in political ad spend in the run up to the US presidential election, including $3.1 billion on local television networks alone.
The report warns that big sports and other tentpole events are starting to be hit by ratings erosion with primetime ratings of the Rio Olympics down 25% on London. Part of this is due to more consumers preferring to snack on highlights rather than sit through whole events, the report says.
The main digital media drivers this year are social media, growing 44% this year to nearly $16 billion, and online video, up 32%. After only a couple of years since it first launched, social video advertising already represents $2.2 billion, which is 24% of total video ad formats.
Media vendor advertising sales were strong in the first half of the year, up 6.1% overall over a weak 2015 period. Ad sales in the first six months of this year were driven by national TV (up 4.6%), digital media (up 18.3%) and OOH (up 3.8%) while print and radio advertising sales continued to decline (down 9% and 2% respectively). Second half-yearly growth is predicted to be weaker due to a surge in the second half of 2015.
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