When Will Internet Ads Finally Overtake TV?

by CXOtoday News Desk    Jun 22, 2015

digital

With consumers spending more and more time online, Internet advertising overtake television as the dominant medium for global ad spending. Surging growth in advertising via mobile phones and tablet computers will drive this trend, says a recent report by Zenith Optimedia, which expects mobile advertising – via smartphones, iPads and other tablet computers – to more than double its share of global ad spending between 2014 and 2017, to 12.9 percent. It would contribute 70 percent of growth in all advertising spending over that period.

The digital marketing researcher joins a long list of other research companies, experts and analysts that have spent countless hours trying to predict when television - which has long drawn more ad dollars than any other kind of media - will be surpassed by the Internet and digital channels.

“The Internet is quickly establishing itself as the dominant advertising medium, and on current trends will overtake television by the end of the decade,” said Zenith Optimedia CEO Steve King. According to him, the amount of time viewers spend watching online video on their laptops, tablets and smartphones is increasing rapidly, and advertisers are shifting their budgets online to follow them.

A Forrester study last year also predicts online marketing to reach $103 billion in 2019, compared with $86 billion for TV. In all, digital ads by 2019 will account for 36 percent of all ad spending, above 30 percent for TV.

There are several factors contributing to this trend, apart from the rise of mobile devices as Zenith stated. Undoutedly TV today remains the biggest advertising platform, but broadcast and cable companies face increasing pressure to adapt to changing consumer habits. Audiences now want more on-demand options for watching videos and listening to music, helping newer services like YouTube and Spotify grow.

Forrester predicts in 2016, advertisers will spend more on digital advertising than TV ads. Email marketing, social media, display advertising and search marketing combined will be growing at a combine annual growth rate of 30% by then (up from 24% in 2014.)

With digital screens becoming a critical part of the marketing mix  as these figures suggestDavid Silverman, a partner at PwC US, states in a WSJ blog, “With consumers increasingly relying on digital screens for everything from information to entertainment, numbers like these should come as no surprise. Interactive clearly offers a unique proposition for marketers and agencies which they will be relying on more in the future.”

While it is common to still ask, when will digital ad spend finally overtake TV? An eMarketer prediction has a safer, yet a practical answer. It said in a report, this milestone should be reached at the end of this decade. I think it’s going to be sooner. While TV ad spend continues to grow, it is at the anemic rate of 3.7% vs the 19% growth explosion we just saw in digital.

Experts believe, these are very exciting times for everyone in digital advertising, as marketers and agencies are planning to direct more of their ad budgets to digital video, and a significant number of these spending decisions will be made in the coming quarters.