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Digital Advertising Expected to Match Television for First Time in 2015

Digital Advertising Expected to Match Television for First Time in 2015

Two leading forecasting firms reported Monday at the UBS Global Media and Communications Conference that they expect U.S. television advertising to suffer in 2015 but predict modest increases for ad revenue in digital media. 

ZenithOptimedia expects global sales to increase 4.9% to $545 billion, while Magna Global is projecting a more conservative 4.8% increase to $536 billion. 

Projected growth rates are lower than this year’s 5.5%, but 2015 looks strong considering the absence of this year’s Winter Olympics, FIFA World Cup, and the U.S. mid-term elections, they said.

The trend of ad buyers spending more on digital than TV will continue in the U.S. next year, Magna reports, according to Deadline, and they expect digital to match TV for the first time. 

Magna detailed seeing trouble for U.S. television, describing this year’s 4% growth as “mediocre” despite sports and political spending and overall improvements in the economy. 

Internationally, TV accounts for 39.6% of spending, which “has now peaked,” says ZenithOptimedia . 

That number will slip to 37.4% in 2017, while online video will grow to 2.8% of the market from 1.9% in 2014. 

Chief executive of ZenithOptimedia Worldwide Steve King commented

Mobile technology is creating new opportunities for brands to build relationships with consumers, while programmatic buying is making brand communication cheaper and more effective. 

Social media provides a strong example of how to advertise effectively on mobile platforms, and we expect mobile marketing to develop further as other media learn from this example.

Buyers also will spend more in Latin America, where countries such as Venezuela and Argentina have a higher inflation rate. 

Advertisers are also likely to target parts of Asia including China, India, Indonesia, Malaysia, Pakistan, Philippines, Taiwan, Thailand, and Vietnam. 

The most fundamental factor in the projected sales was the shift of media mixes towards digital, Magna said: 

Marketers are now more comfortable with the level of brand safety and accountability provided in the digital media space than they were just one or two years ago, and they are also keen to seize the opportunities created by data-based programmatic buying techniques.

The firm expects U.S. ad revenues to increase 2.7% to $169.5 billion in 2015, with television down 1.4%, and digital up 15.5%. It also expects an 8.2% fall for newspapers, 9.4% drop for magazines, and 1.2% dip for radio.

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