Advertising Forecast Calls For 2 Key Milestones This Year

October 5, 2018

US media advertising sales are forecast to reach an all-time high of $207 billion this year, forecasts MAGNA, as spending grows by 6.9% (and 5.2% excluding cyclical events). But that may not be the biggest story to come out of the forecast, which sets its sights on two milestones this year.

1. Digital to Take Majority Share of Ad Spending

Digital ad spending has well and truly overtaken TV ad spend as the single largest medium, but it has continued to trail traditional ad spending overall.

That might be about to change. This year MAGNA projects that digital ad sales will surpass $100 billion (a milestone in its own right), with a forecast total spend of $106.6 billion.

That would represent a majority (51.5%) of US media ad sales, overtaking offline ad spend, which is expected to decline by 4.7% (excluding cyclical events) to $96.6 billion.

MAGNA seems to believe that trends in ad spending are accelerating: a similar forecast last year called for this transition to take place in 2019.

[Which Ads Have the Biggest Purchase Impact – Digital or Traditional? Find Out in MarketingCharts’ 2018 Purchase Influencers Report.]

Among the biggest drivers of digital’s growth in the US are social media (+32.6% this year) and video (+24.7%), with search (15.8%) also expected to enjoy double-digit growth. A new forecast from Zenith expects that social and search combined will represent two-thirds of global ad spending growth from 2017 through 2020.

Meanwhile, mobile ad spending continues to rise at a fast clip, with a 30% increase projected for this year. Which brings us to our next big milestone.

Mobile to Overtake TV in Ad Spend?

Mobile’s 30% expected growth rate this year means that it will exceed $70 billion in ad sales.

In so doing, mobile would surpass TV for the first time. This year TV ad sales (national and local combined) are expected to total $64.2 billion when including cyclical events – the Winter Games, World Cup and Elections – and $60.5 billion when excluding those events. Those cyclical events have an impact on growth projections: including them results in 9.1% growth for local TV, while their exclusion leads to a 4.4% decline. Likewise, their inclusion gives national TV a slight bump (+0.8%), while the opposite is true when they’re left out (-0.9%).

Either way, the TV ad spend totals would lag mobile ad spending, which would rise to account for 1 in every 3 dollars spent on advertising this year.

The full forecast is available here.


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