The times they are a changin’ and faster than ever. For the first time, digital advertising in the United States will surpass the amount of money spent on traditional ads used by television and print media, a research firm predicts.
This news comes from eMarketer, a New York City-based research firm. The story was first reported by the Washington Post. It represents a major economic shift for traditional media platforms. By the end of 2019, eMarketer expects companies to spend nearly $130 billion on digital ads, compared with about $110 billion on traditional advertising.
That’s about 54.2 percent of the ad market for digital versus 46.8 percent for traditional media. eMarketer predicted that spending on digital ads will continue to outpace that of traditional ads. By 2023, digital ads will capture more than two-thirds of all ad spending, according to the firm’s estimates.
Ad spending on traditional broadcast television will decline 2.2 percent in 2019, to about $71 billion, eMarketer said. Part of the reason is the absence of elections and big sporting events, such as the Olympics.
The increase in digital ad dollars will come, in part, from steep declines in print ad formats including print versions of newspaper and magazines, which are expected to decrease by 18 percent. Ad spending on directories such as the Yellow Pages will fall by 19 percent, eMarketer said.
“The steady shift of consumer attention to digital platforms has hit an inflection point with advertisers, forcing them to now turn to digital to seek the incremental gains in reach and revenue which are disappearing in traditional media advertising,” said Monica Peart, eMarketer’s forecasting director.
The top two digital advertisers in the United States — Google and Facebook — are expected to maintain their dominant hold on ad dollars. Their combined revenue will be about 59 percent of the market.
Google’s share will drop slightly from 38.2 percent to 37.2 percent, eMarketer projected, while Facebook’s share is expected to remain virtually unchanged, rising by less than half of a percentage point from 21.8 percent to 22.1 percent this year.
While Facebook has been rocked by scandals and is negotiating with the Federal Trade Commission over a multibillion dollar fine tied to its privacy practices, the company’s market share increase will be driven by Instagram, eMarketer said.
Amazon, Microsoft and Verizon round out the top five digital advertisers, and the latter two are expected to lose ground in ad spending. Amazon’s advertising business, the third largest in the United States, is projected to grow by more than 50 percent in 2019, claiming a total of nearly nine percent of the digital ad market.
“The steady shift of consumer attention to digital platforms has hit an inflection point with advertisers, forcing them to now turn to digital to seek the incremental gains in reach and revenue which are disappearing in traditional media advertising,Monica Peart, eMarketer’s forecasting director
With Amazon’s suite of sponsored ads, marketers have unprecedented access to the “digital shelves” where consumers are shopping. EMarketer said it has adjusted its projections higher for Amazon following the company’s latest earnings report, “putting it on track to close the gap with No. 2 Facebook” in the digital ad market.
More than two-thirds of spending on digital ads this year will be dedicated to ads on mobile devices, eMarketer said, totaling more than $87 billion.
This advertising future puts major pressure on traditional broadcasters, whose traditional commercial income continues to fall and is being replaced by digital ads. Only by adopting a strong online base, will broadcasters be able to withstand the trend toward digital advertising.
It also means with that with print publications moving online and doing more traditional video reporting, media coverage continues to blur into something entirely new. What’s fairly certain is this trend is permanent. Digital ads are poised to takeover.
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