Digital ad spending to top traditional for first time

Amazon continues to eat away at the duopoly of Facebook and Google with an increase in share of 8.8 percent.

Digital ad spending in the U.S. will exceed traditional ad spending in 2019, according to a forecast out Wednesday by eMarketer. Much of that share will come from Google and Facebook, with Amazon gaining speed from behind.

The report predicts that digital will make up more than two-thirds of total U.S. media spending by 2023

The numbers. Digital ad spending is forecasted to grow 19 percent to $129.34 billion this year, and will make up more than half (54.2 percent) of total U.S. ad spending. At $87.06 billion, mobile will account for more than two-thirds of that amount.

Amazon’s U.S. ad business will swell more than 50 percent this year and its share of the U.S. digital ad market will increase to 8.8 percent, knocking into the share formerly enjoyed by heavy hitters Google, Facebook, Verizon and Microsoft.

The Interactive Advertising Bureau (IAB) released revenue numbers earlier this month showing that digital ad revenues rose to $26.2 billion in the third quarter of 2018, capping off what it calls the industry’s “highest-spending first three quarters on record” — a 20.6 percent increase over 2017.

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Where are those dollars coming from? From traditional ad spending. Spending share on non-digital advertising is down this year from 51.4 percent to 45.8 percent, led by directories like the Yellow Pages, which are down 19 percent. Spending on traditional print will drop nearly 18 percent and TV ad spending will decline 2.2 percent to $70.83 billion this year, a dip eMarketer attributed to lack of any big elections or sporting events.

Why you should care.  The trend is hard to ignore — advertisers are spending on digital and there’s no sign of them ever going back.

“2018 was a landmark year for U.S. digital advertising,” said Sue Hogan, SVP, research and measurement, IAB. “Brands continued their record-breaking investment in the marketplace in the third quarter.”

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Monica Peart, eMarketer forecasting director, said, “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.”