Digital Now Makes Up 51% of US Ad Spending

Search, social and video were the formats and channels that led the way. Finance, Pharma and Technology were the big vertical spenders.

Ad sales up, especially digital. Magna says that “net advertising sales” will grow by 6.9 percent this year to reach $207 billion, which is “a new all-time high.” And, for the first time, digital ad revenues surpassed 50 percent of total ad spending in the US. The company said that digital ad revenue in 2018 will reach $106 billion, or 51.5 percent of total ad sales.

Digital advertising on mobile devices accounts for roughly two-thirds of all digital ad spending, representing a 30 percent growth rate year over year. Magna says that mobile now exceeds TV and is twice desktop ad revenue. Accordingly, the firm predicts that desktop ad revenue will decline by 4 percent based on declining usage and ad blocking.

Search, social and video lead the way. Among digital formats, Magna called out paid search, social media and online video advertising, which grew by 18 percent, 38 percent and 27 percent respectively. Connected TV, as a subset of video, saw revenues grow 40 percent to reach $2 billion.

Most traditional media channels (TV, print, radio) were down, with the exception of out-of-home (OOH). Within the latter category, cinema grew by 12 percent and the rest of OOH by 3 percent.

Ad revenue growth happened across industries. But Magna highlights Finance, Pharma and Technology as the largest spenders in the first half of 2018. Compared with 6 percent growth overall in the first half, these industries grew their ad budgets by 15 percent to 20 percent.

Magna expects 4 percent overall ad sales growth in 2019.

Why it matters to marketers. The report suggests that already hot (mostly digital) channels and formats will continue to thrive, which may drive up prices further. There may also be buying opportunities in some traditional media channels, where prices are falling because of shrinking demand.

Source: Greg Sterling – MarketingLand.com

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