Consumer ad spending is shifting into digital from TV significantly faster than political ad spending, according to industry estimates.
For political campaigns, online ad spending is expected to hit $1.1 billion this cycle. While that’s a 700 percent increase over 2012, consultants estimate digital’s share of campaign media budgets will remain around 20 percent.
But in the consumer market, two new estimates predict digital ad spending will surpass TV by 2018 at the latest. Interpublic’s Magna Global reported that TV ad sales will see a 0.1 percent drop — the first in a non-recession year — in 2015 to $193 billion while digital will see a 17.2-percent increase in spending to $160 billion.
“New generations increasingly rely on online VOD (sometimes ad-funded, sometimes premium ad-free) for video entertainment, while advertisers are keen to embrace new digital formats (video, social),” Vincent Letang, Magna’s director of global forecasting, said in the report. “Both supply and demand for linear TV impression are therefore decreasing, leading to little or no spending growth outside even-numbered years over the next five years. As a result digital media ad sales will become the number one contributor to global ad sales by 2017.”
The shift could happen domestically as early as 2016 with digital expected to record $68 billion in ad sales compared with $66 billion for TV.
Another report released Monday showed that TV’s grip on ad dollars globally is diminishing faster than previously expected, although Publicis Groupe’s ZenithOptimedia predicted digital media will surpass TV in 2018.
Moreover, the group said that in 2018 mobile advertising will overtake desktop for the first time and account for 50.2 percent of all Internet advertising. That would make mobile the most lucrative ad channel next to television.
“Over the last year or so, that’s really been the first time we’ve seen money specifically coming out of TV and going onto digital,” Jonathan Barnard, head of forecasting for ZenithOptimedia, told the New York Times. “We’ve been hearing about the loss of revenue from TV to digital for a long time, but the last year has been when it’s been fairly visible.”
This comes as digital consultants are preparing for a cycle when campaigns will keep digital at around 20 percent of their media spend.
“Generally, the trend looks to be a digital ad spend of between 15 percent to 20 percent of total media budget this cycle,” Jim Walsh, CEO of DSPolitical, said in an email. “As the total share increases, there's also a dramatic increase in the total number of campaigns using the technology.
“You'll likely see the majority of state House and Senate caucuses driving some portion of their media spends towards voter-targeted digital advertising for the first time ever.”