Digital Ad Spending 2018 Forecast

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Well, it finally happened.

 

2017 is going to go down as the first year in history when more money was spent by advertisers on digital and online media compared to traditional television advertising.

 

Yes, you are reading it correctly. For the first time ever, advertisers spent billions of dollars more on online in digital advertising compared to traditional television advertising, and the gap is expected to only continue to grow larger and larger in years to come.

Digital Ad Spending 2018 Forecast

According to research coming out of the advertising industry, digital and online advertising topped $209 billion around the world. This represented 41% of the entire advertising market, whereas television advertising only brought in 35% of the market – with ad spends of $178 billion globally.

 

Some believe this is a doom and gloom kind of situation for traditional television advertising, but it ends up that nothing could be further from the truth. Television advertising rates aren’t dropping right through the floor – they aren’t dropping at all – but are instead growing very slowly or holding steady.

 

It’s just that so many more advertisers are pouring a significant chunk of their advertising budget into the online market that the digital realm of advertising is growing so much faster than the television advertising market ever could hope to.

 

Research published by the Magna Research Group backs this data up. By the end of 2018, this research group expects online and digital advertising to grow by another 13% all the way up to $240 billion or so. Television advertising is expected to grow as well, by a much more modest 2.5% (coming in at close to $185 billion) – but all are expected to grow.

 

Things could be shaken up considerably across the board, however, as the Olympics will television and a big presence online throughout 2018 and the US midterm elections will also be a big story. Television advertising could grow significantly faster because of these unique “one-off” kinds of situations, but online is also expected to spike because of these situations as well.

 

Digital advertising is growing faster than everyone could have expected

It’s almost impossible to imagine now that there were some pretty smart, pretty strategic, and pretty savvy businesses, investors, entrepreneurs, as well as advertisers and marketers that believed the online experience to be nothing more than a fad and a tool that would NEVER become a powerful force for business just a few short years ago.

 

The internet 20 years ago was a completely different place than it is today, with it becoming such a big part of the fabric of our day to day lives. It’s impossible to imagine the world without the internet as it is right now, just as it’s impossible to know what the digital world is going to look like in another 20 years.

Major online advertising platforms – especially those run by Google, Facebook, and the like – are seeing significant growth in all of the online advertising channels that they make available. Google in particular has a bit of a stranglehold on online advertising, as they were one of the earliest adapters to this format and one of the few major technology company that built their foundation almost completely on the back of online advertising before it was popular to do so.

 

Researchers expect digital advertising rates to grow considerably over the next 10 years, especially as more data becomes available to better laser targeted advertising. Major companies like Google and Facebook have been leveraging data collection tools that give their advertisers an almost unbelievable advantage, but smaller companies, smaller media channels, and smaller digital platforms are starting to be able to utilize the same kind of technology as well.

 

Digital spending isn’t going to slam the brakes on television advertising anytime soon

 

Yes, we are seeing a fundamental shift away from television today in a way that most wouldn’t have been able to predict, and in a way that many legacy television companies almost refused to accept.

 

Just as Steve Jobs turned the music industry on its head when he unveiled the iTunes operation, new companies – companies like Netflix, for example – are turning the traditional television industry on its head as well with more and more people cutting cords left and right and abandoning traditional television along the way.

Digital Ad Spending 2018 Forecast

At the same time, live TV shows (particularly sporting events) still make advertising on television attractive enough for a large media purchasers. The rates for these advertisements are dropping across the board – though marquee events like the Super Bowl are still charging higher and higher fees for advertisements every year – and TV advertising definitely isn’t going away anytime soon.

 

There has been some cannibalization of television advertising budgets, but the overwhelming majority of companies are looking for new ways to spend the same amount of money on television while at the same time pouring new money into digital media.

 

Digital media does have a significant advantage over legacy channels

 

There is a huge advantage that digital media and digital advertisers have over those legacy channels like television, and that is the ease and efficiency of tracking, measuring, and optimizing advertisements that are placed in the digital realm.

 

Digital advertising offers marketers and advertisers the opportunity to track and measure their progress in a way that legacy media never could. Thanks in large part to technology, digital advertisements are more measured, more optimized, and more targeted than traditional media ever was, and it ends up that it’s a lot more efficient to modify and adapt major digital campaign compared to more traditional television spots.

 

It will be very interesting to see how the advertising spend is split in the future between digital media and national television media. As more and more companies jump on board digital media, the television media may become less cluttered and less crowded – with rates (ideally) dropping at the same time.

 

The prices on televised media drop considerably, more people may begin to take advantage of media – and with less competition in the space these advertisements may become more effective.

 

One thing is for certain, however. Digital advertising and going anywhere anytime soon.

 

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