SMBS Take Note: Online Advertising to Overtake TV Advertising Next Year

BY Courtney Huckabay
Featured image for “SMBS Take Note: Online Advertising to Overtake TV Advertising Next Year”

"PwC has issued its latest annual Entertainment & Media Outlook report, containing projections for online and offline media advertising markets through 2020. The outlook for traditional media advertising is similar to previous forecasts in that TV and out-​of-​home advertising have the healthiest futures, while the outlook for print (at least in print format) is dim. As consumer behavior shifts online, so will advertiser spending, with some interesting milestones expected to take place during the forecast period."

"Online advertising is expected to overtake TV advertising in size next year, a much more bullish forecast than in last year’s report, when that milestone was forecast for 2019," Marketing Charts reports. "It’s the same prediction as recently made by eMarketer (among others), which at the time also envisioned mobile rivaling TV in ad dollars in 2020. (The PwC forecast doesn’t see mobile coming anywhere close to TV by 2020.)"

Business owners are well-​served to take advantage of online advertising opportunities! Online ads can reach customers where they are and where they are headed well into the future. AudienceSCAN found 5.8% of adults plan to purchase online advertising during the next 12 months.

"Nevertheless, PwC predicts that online advertising spending will exceed $75 billion next year, surpassing the $74.7 billion projected for TV. Online advertising is expected to grow at a compound annual rate of 9.4% from 2015 through 2020, compared to TV’s 3.2% rate."

"As expected, mobile’s share of online ad spend is expected to grow throughout the forecast period, increasing from a forecast 41% share this year to a predicted 49% share in 2020, buoyed by a 2015–2020 compound annual growth rate (CAGR) of 17.5%. It’s interesting to note that PwC doesn’t see mobile attaining majority share of US online advertising by 2020, though it will be close."

Stay ahead of the game and place online ads now. Start focusing on digital campaigns that compliment traditional marketing strategies. AudienceSCAN reports 11.4% of Online Advertising Purchasers plan to attend holiday/​Christmas expos. They could be syncing up their marketing with these types of events.

"Among mobile advertising types, display (including video) is expected to remain larger than search, rising from 58% share of mobile ad spend to 62% in 2020. Mobile video will be the fastest-​growing segment, with its 2015–2020 CAGR of 30.3% bringing it almost on par with other mobile display advertising formats by 2020."

"Of the “wired” (non-​mobile) internet advertising types, paid search is expected to retain its dominance, growing from $21.5 billion this year (53% share of wired internet advertising) to $24.4 billion in 2020 (52% share). That’s also an interesting shift from last year’s report, in which paid search was predicted to cede its majority share of wired internet advertising by 2019."

"Despite retaining its majority share through 2020, paid search’s CAGR of 3.6% will be eclipsed by video ads’ forecast CAGR of 19.3%, which will double desktop video advertising spending from an estimated $5.1 billion this year to $10.2 billion in 2020."

Even Online Advertising Purchasers are watching videos online! According to AudienceSCAN research, during the past 6 months, 23.5% have used the internet via browser, tablet or mobile phone to view a television commercial on YouTube. Video ads are where it's at!

"Meanwhile, among the other “wired” internet advertising categories, display (non-​video) ads are predicted to have the slowest growth, actually declining with a CAGR of ‑3.6%. Display ad revenues are forecast to shrink from $10.9 billion this year to $9.5 billion in 2020."

AudienceSCAN data is available as part of a subscription to AdMall for Agencies, or with the SalesFuel API. Media companies can access AudienceSCAN data through the AudienceSCAN Reports in AdMall.