By 2021, digital ad sales will represent half of the global market, a new forecast predicts. Credit: David Paul Morris/Bloomberg
The agency expects digital-based ad sales to become the No. 1 media category next year, reaching a market share of 40% and pulling in $202 billion worldwide. In comparison, linear TV ad sales will bring in $186 billion next year and have a 36% market share.
But WPP’s GroupM expects TV to remain dominant, predicting that it will hold 41% of the global pie in 2017, while digital ad sales will rise to 33%.
Ad sales will rise 5.7% in 2016 to $493 billion worldwide, Magna president, which would be the strongest growth since 2010. But the pace is expected to slow considerably next year to 3.6% due to economic and political uncertainty, the agency said. That would be the lowest growth rate recorded in 15 years outside of the recession of 2008-2009.
TV ad sales were resilient in 2016, increasing 4% to $186 billion. But Magna expects a 0.1% decline in global TV ad sales next year.
Digital advertising surged 17% to $178 billion this year. By 2021 Magna expects digital ad sales will represent 50% of the market at $299 billion, while TV will plateau at $195 billion and a 33% share.
Next year Magna also expects the majority of digital ad sales to be generated by mobile impressions.
U.S. advertising will grow nearly 7% in 2016 to $180 billion, the strongest growth rate in 12 years. In October, Magna had predicted domestic ad spending would grow 6.3% to $179 billion. It will climb just 3.6% next year, Magna said.
Social and search are helping to drive the global advertising market.
“The resurgence of television did not come at the expense of digital,” Vincent Letang, exec VP-global market intelligence, Magna, said in a statement. “Both grew strongly this year because advertisers are funding social spend and search spend by reallocating below-the-line offline marketing budgets more than traditional branding mass media. At the same time, they had to face significant cost increases in television to maintain their share of voice and reach.”
This article first appeared in www.adage.com
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