A long-anticipated milestone will finally be attained this year according to eMarketer: Digital ad spending is expected to outpace traditional ad spending beginning in 2019, with digital going on to comprise more than two-thirds of total media spending by 2023.
This year, total spending on digital ads will grow 19.1% to $129.34 billion, eMarketer predicts, a level nearly $20 billion higher than outlays on traditional platforms such as television. The dominant category within digital spending is mobile, which is expected to total $87 billion in 2019, more than two-thirds of the digital tally.
Many traditional ad categories remain in free-fall as technology and dollars shift. Telephone directories like the Yellow Pages, for example, will fall 19% this year, while print newspapers and magazines (excluding their online versions) will drop nearly 18%. Those projected declines, plus a year in TV that lacks broadly consequential political elections, or World Cup or Olympics telecasts, will lower traditional ad spending’s share in the U.S. to 45.8% in 2019 from 51.4% last year.
TV ad spending will drop 2.2% to $70.83 billion this year, the market research firm predicts, before getting a boost back to positive growth in 2020 from the presidential election.
Digital ads offer more precise targeting, including the capability of reaching a consumer at the actual point of purchase. Proponents for traditional venues such as television have emphasized the concept of “brand safety,” pointing to public embarrassments suffered by YouTube, Facebook and others, in which blue-chip brand messages have run next to offensive or even illegal content. Even so, ad dollars are following the overall consumption pattern in the U.S., with digital showing no signs of stopping its momentum.
“The steady shift of consumer attention to digital platforms has hit an inflection point with advertisers, forcing them to now turn to digital to seek the incremental gains in reach and revenues which are disappearing in traditional media advertising,” eMarketer forecasting director Monica Peart said.
The race for digital market share is also involving more than the marketplace’s two longtime lead horses, eMarketer projects. Google and Facebook will see their shares decline even as their revenues grow — Google’s will dip to 37.2% from 38.2% last year and Facebook’s to 22.1% from 21.8%.
Coming on strong as the No. 3 digital ad player is Amazon, whose U.S. ad business will grow more than 50% this year, eMarketer says. The e-commerce giant’s share of the digital ad market will reach 8.8% in 2019 and approach 10% by next year.
“Amazon has a major benefit to advertisers, especially consumer packaged goods and direct-to-consumer brands,” Peart said. “The platform is rich with shoppers’ behavioral data for targeting and provides access to purchase data in real-time. This type of access was once only available through the retail partner, to share at their discretion. But with Amazon’s suite of sponsored ads, marketers have unprecedented access to the ‘shelves’ where consumers are shopping.”
Debra Aho Williamson, principal analyst at eMarketer, said Instagram has helped Facebook overcome a series of blows to its reputation, everything from data scandals to political misdeeds and crime facilitated by the core social platform. “There’s strong demand for ads in Instagram Stories, and Instagram still benefits from the perception that it’s less impacted by the challenges core Facebook has faced,” she said.