Digital Ad Spending Set to Top TV in U.S. Next Year for First Time: Study

variety.com

Madison Avenue is still plowing billions of bucks into television advertising — but digital is poised to eclipse TV for the first time in 2017.

Next year, led by Internet heavyweights Google and Facebook, total digital ad spending in the U.S. will hit $77.4 billion, or 38.4% of total ad spending, according to a forecast by research firm eMarketer. TV ad spending is projected to total $72.0 billion, or around 36% of total media ad spending in the U.S.

And digital, fueled by mobile advertising, will keep growing faster than TV, per eMarketer. By 2020, TV ad spending share is expected to reach $77.2 billion — dropping its share to one-third of total media ad spending. Digital ad revenue will exceed $105 billion, representing 45% share.

Meanwhile, for 2016, eMarketer has cut growth projections for TV ad spending to 2.5% this year, compared with its previous 4.5% forecast. At the same time, the researcher revised estimates for digital ad spending to an increase of 15.4% this year to $68.82 billion.

“We still expect positive growth for TV ad spend, driven by political advertising and the Summer Olympics,” eMarketer senior forecasting analyst Martín Utreras said. “However, we see more ad dollars flowing to digital as a way of optimizing spending in what may be a challenging economic year.

Mobile continues to drive growth within overall digital ad spending. Mobile ad spending in the U.S. will grow 38% in 2016 to $43.6 billion, representing 63.4% of total digital ad spending, according to eMarketer.