Which Way Are US Media Advertising Sales Trending?
November 11, 2016 - MarketingCharts
Expect more of the same next year. That is, many of the revenue trends that have been driving the US ad market for a couple of years now ought to continue in the year ahead, per MAGNA’s recent forecast [pdf]. On the traditional media side of things, national TV and out-of-home are bucking the tide of declining sales, while among digital media, mobile, social and video look set to continue pacing growth.
Total traditional media ad sales are forecast to decline by 2.2% next year after an expected drop of 1.5% this year, estimates that align with CMOs’ own projections. That should drive traditional media’s market share of total ad spending down from 60.9% this year to an estimated 57.5% next year.
Looking at specific media:
- National TV (excluding the effect of political and Olympic ad spending) sales are expected to grow by 3.2% this year, moderating to a 1.5% increase next year;
- Local TV isn’t set to have quite the same outlook, with a 1.1% decrease this year followed by a 1% drop in 2017;
- Newspaper ad sales declines don’t seem to have any end in sight: this year’s estimated 11.1% decrease is forecast to accelerate to a 12.5% drop next year;
- Magazine ad sales are following a similar pattern, with the 10.6% forecast reduction this year expected to be followed by a 13.1% drop next year;
- Radio is also seeing declines, forecast at 3.6% this year and 3.2% in 2017; while
- Out-of-home is continuing to experience growth, though the 14.6% and 11.7% increases projected for this year and next, respectively, are above what the Outdoor Advertising Association of America has been reporting.
Unlike traditional media, digital channels are seeing rapid sales growth, though not uniformly. As detailed in the IAB’s latest revenue report, mobile, social and video are the fastest-growing channels, with the display market (static banners) seeing more headwinds.
Here’s the breakdown by channel:
- Mobile ad sales are expected to grow by 45.4% this year before slowing to a 31.7% increase in 2017;
- Social ad sales are predicted to increase by 43.7% this year, but that growth will almost halve next year (23.7%);
- Video (excluding social) is forecast to better maintain its growth rate, with the 26.9% rise projected for next year not far behind this year’s 31.7% increase;
- Search ad sales will continue their double-digit growth, expected at 14.5% this year and 12.3% in 2017; while
- Display losses will halve next year (-7.1%) after a 14% decline this year.
All in all, digital media ad sales should climb by 15.1% this year and then by 12.5% next year, per the forecast.
What this means is that – as variously forecast – digital media will grow to equal TV ad sales this year, with each capturing 38% of the ad market. By 2020, digital media will account for a majority 51% of all US ad sales, if MAGNA’s forecast holds true.