Paid media ad spend climbing 5% in 2016; mobile catches TV in 2020

Despite campaign spending during this election year and brand spending during Rio’s Summer Olympic Games, U.S. spending on paid media is expected to climb just 5%, with most of the gain coming through digital channels.

TV spending is expected to grow less than 3%, according to a new report from eMarketer, to $70.6 billion in 2016 from $68.88 a year ago. Competition from paid streaming services and other video-on-demand platforms likely will continue to take viewership from traditional TV outlets, cutting into revenue and, in fact, pushing them to digital.

Digital is forecast to grow to $68.82 billion, up more than 15% from a year ago.

That growth pales in comparison to mobile, forecast to climb 38% this year as brands look to connect with Millennials and younger consumers who have adopted mobile as their screen of the moment. eMarketer says advertisers will spend $43.6 billion on mobile campaigns, up from $31.59 billion a year go.

Print and radio, meanwhile, both are expected to see negative growth for the year, with print declining more than 7% to $26.06 billion from $28.16 billion. Newspapers are expected to drop 6% to $13.77 billion and magazines will be down about 1% to $12.97 billion.

Ad spend on radio also is expected to be lower, off more than 1%, to $14.12 billion from $14.27 billion.

2020 VISION

The report continues to project 2017 as the year that spending on digital media eclipses the traditional TV market. Digital is forecast to see a more than 12% hike in ad spend to $77.37 billion, compared to TV’s 3% bump to $72.01 billion in 2017.

Longer term, the picture is even more compelling for digital.

Although TV spend is forecast to increase some 12% between 2015 and 2020, reaching $77.17 billion, digital growth is primed to rocket to more than $105.21 billion, a 76% increase over the same period.

MOBILE REMAINS THE STAR

Ad spending for mobile campaigns is expected to see growth topping 144%. Spending on mobile alone — $77.1 billion – is expected to nearly equal the spend on traditional TV.

Spending on newspapers and magazines will continue its slow decline, with print media overall down more than 8% by 2020 to $25.89 billion.

That decline will mean publishers – more than ever before – will need to go online with their content; and, where they can, turn to online video as a new, and potentially, primary revenue stream.

CPM for online video typically are significantly higher than traditional online banner ads, meaning that revenue from ads surrounding original video content has the potential to be rich.

A Reuters Institute report said it found that 79% of editors, CEOs and digital leaders it surveyed said they would be investing more in online news video in 2016, and more than half called deepening online engagement was a “top priority” for them this year.

Here’s eMarketer’s report.

Stay tuned.

Jim O’Neill is Editor of Videomind and Principal Analyst at Brightcove. You can follow him on Twitter @JimONeillMedia and on LinkedIn