Pivotal Sees a 2.5% Increase in 2014 U.S. Ad Market

As we approach the end of the year, major agencies and research firms will begin to release their updated forecasts for the ad market for 2014. Pivotal Research Group has just released its latest numbers which project total ad saleschart1spending to be up slightly for 2013.  The firm is also anticipating a 2.5% increase for next year, excluding the line items for politics and the Olympics. When those number are added in, total spending will amount to $186.2 billion in 2014 spending or a 4.3% jump over this year.

If Brian Wieser at Pivotal has it right, marketers will pay $178.5 billion to promote their products and services this year. National digital is the star performer. With $13.1 billion in total revenue, a jump of 19% over last year, national digital and mobile display, $10.1 billion, and online video, with $2.975 billion, are the components of this category. Next year, this category is expected to reach $14.65 billion.

In a category labeled local mass media, Wieser predicts local digital will reach $5.588 billion by year-​end. This figure is dwarfed by spending on local broadcast TV which will end the year with $16.4 billion in ad revenue. Cable TV is also a significant player with $4.5 billion. Next year, local TV will increase by 6.2% with broadcast capturing $16.9 billion and cable TV collecting $4.7 billion. Local digital will continue to chip away at TV’s share by rising 9.5% to $6.067 billion.

The Pivotal analysis offers a supporting argument for its high rating of online video. The analysts believe that Google is poised to drive growth in the category. Google owns about 40% of the sector’s revenue through its YouTube channel. Google recently allowed Nielsen to apply its Online Campaign Rating (OCR) service to  YouTube ads which means that marketers will have a better handle on how their video ads are performing. Analysts don’t expect a mass advertiser defection from TV to YouTube for 2 reasons – the goal of online ad campaigns often differ from TV campaigns in terms of desire for broad reach and for now, the quality of most programming on YouTube is not good enough to entice major marketers to move significant funds from TV to online video.  However, online video is one digital format to watch over the next few years and marketers will have to consider how it will fit into their media mix. In many cases, they may cut their TV budgets to fund online video.

Have your advertisers mentioned moving funds from TV to YouTube now the Google has allowed OCR?

Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.