Digital media spending saw more money from traditional TV budgets migrate its way in 2014, nabbing 30% of the market share in the U.S. and growing by 15% to $49 billion, a new report says.
Magna Global said social and video advertising led the growth, up 57% and 39% respectively, and renewed its forecast that digital ad spend would catch up to TV by 2016, with each segment seeing $68 billion in revenues, reported the Wall Street Journal.
The company also updated its August forecast that saw TV spending declining 1% this year, saying it now expects spending to drop 3%, despite more buying of time for political and Olympic campaigns. TV ad spending was up 3% in 2014.
“TV will get a smaller piece of the pie than we previously thought based on our analysis of what happened in 2014,” said Vincent Letang, Magna Global’s director of global forecasting, pointing to modest inflation and declining TV ratings for sluggish TV ad spend.
But Magna also said the shift by consumers from traditional TV to online video has prompted more brands – as radio and print spending already has been cut to the bone – to shave spending on traditional TV and repurpose it online.
Magna said several large ad categories accelerated their shift from traditional TV advertising to digital last year and are expected to continue that move in 2015.
In the past year, a number of brands have announced major shifts in their ad spend. Visa, for example, said it would, for the first time ever, spend 50% of its ad dollars online because, “that’s where the consumers are,” according to CMO Antonio Lucio.
Potato chip maker Ruffles, one of PepsiCo’s brands, put nearly two-thirds of its ad budget in television in 2013, but spent nearly 100% on digital in 2014.
“We’re really trying to reach our target, 25-year-old millennial males, in a more relevant way,” said Dana Lawrence, senior director of marketing at Frito Lay.
Automotive, the second biggest ad spender, shifted more than half of its spend online in 2014, a share expected to continue to rise this year, according to the
Insurer Allstate, meanwhile, has followed suit, moving a big piece of its budget from TV to digital. It estimates about one-third will be digital this year.
“We are following people’s media consumption,” Lisa Cochrane, the company’s senior vice president of marketing said at Ad Week.
And, of course, those people are Millennials.