Digital media ad revenue will surpass TV ad spending faster than expected, according to Interpublic-owned media buying and research firm Magna Global. According to its US Media Owner Revenues Forecast, advertising revenues grew by +1.6% in the first half across all media categories. While digital media remained dynamic, growth is increasingly contrasted between social and video formats (from +30% to +50%), search (+10%) and banner display (+4%). Magna Global predicts that digital media ad revenues will reach $66 billion and that digital will surpass television in 2016 to become the #1 media category, one year earlier than previously expected.
According to Magna Global, Media Owners Advertising revenues showed little growth in the first half of 2015. Ad sales grew by +1.0% in 1Q15 and +0.8% in 2Q15 (all media including direct marketing, excl. P&O). However, they predict that 2016 will show stronger ad revenue growth than 2015, but has reduced its growth forecast to +3.3% from +3.8%. Traditional media will decrease by 2.9%, while digital sales will grow by +15.1%.
The 2015-2016 National TV upfronts were down in terms of volume, for the second year in a row, with CPM increases in the low single-digit range (compared to mid-single digit a year before). Interestingly, the decline of the impression supply seems to have reached the point where inflationary tension might soon come back into play.
Key figures from Magna Global’s forecasts by media segment:
- TV ad sales will decrease by -2.6% (vs. -1.2% in 2014) excluding P&O.
- Print ad sales (newspapers and magazines) will decline by 12% to 14% this year and next.
- Social and online video ad sales continue to show explosive grow in the short term with full-year ad revenue expected to reach +48.2% and +38.4%, respectively.
- Mobile video will also grow by +69% as smartphone and tablet usage continue to grow as more and more content is made available across all screens through apps.
- Search remains robust (+11.8% this year) with mobile search up 46% and desktop search up only 1%.