Digital Advertising Tops TV in the U.S. for the First Time

By Published on .

Credit: Irina_Strelnikova/iStock

Digital advertising sales surpassed linear TV ad sales in the U.S. for the first time in 2016, pulling in $70 billion compared with $67 billion for national and local TV, according to IPG Mediabrands' Magna.

The agency expects 3.7% growth in advertising spend domestically in 2017, a slowdown from the 4.7% increase seen in 2016, which was driven by the presidential election and Olympics.

Digital ad sales are projected to increase 14% to $80 billion, led by social and video, while offline media sales will decline by 3% this year to $103 billion, Magna predicts.

Magna said in December that it expects digital advertising to overtake TV globally by the end of 2017.

Search is expected to remain the largest revenue generator, bringing in $39 billion, a 13% growth over 2016, while video and social is once again expected to post the strongest growth rates of about 28% each.

National TV advertising sales are expected to be flat again, as high-single-digit CPM inflation will just barely offset high-single-digit ratings declines, the agency reported.

Some small and midsize brands could be priced out of national TV in the months and years to come, according to Magna's report. Still, many mass consumer brands will continue to invest in traditional TV campaigns, as some CMOs believe digital advertising still lacks accountability while not being that much cheaper than traditional TV.

Some consumer packaged goods companies did shift money out of digital and back into TV in 2016, but according to the report, that was likely a temporary adjustment.

"We now see CPG companies concentrating their television spending on fewer brands and products and launching some new products without the national TV campaigns that would have been an automatic part of the plan just years ago," the report said.

Print ad sales are expected to decrease by 13% to $18 billion, and radio will decline by 4% to $13.5 billion.

Out-of-home ended 2016 at an all-time high of $7.6 billion, up 3.3%, and is expected to grow by another 3% in 2017.

Most Popular