As ad budgets get reshuffled in 2016, it could be interesting for many media sectors.
For instance, though paid media spending will rise by 5.1 percent, that’s a slower rate than forecasted earlier — and it will wreak the most havoc on TV and radio as advertisers trim investments in traditional media in favor of digital.
In its new report — “US Ad Spending: eMarketer’s Estimates for 2016” — eMarketer estimates U.S. total media ad spending will top $192 billion for the year, partly driven by the US presidential election and the Rio Summer Olympics.
“Conditions in the U.S. have become less supportive for economic growth this year, leading to weaker estimates than previously expected,” notes eMarketer. “A strong dollar, global market fluctuations and plunging oil prices are contributing to the strain on the economy. Because of this, eMarketer has lowered its expectations for total ad spending growth for the entire forecast period.”
That outlook for TV advertising? Tepid at best, rising at a pace of just 2.5 percent.
“Traditional TV ad sales will have a challenging year ahead as a result of declining viewership and increased competition from video-on-demand (VOD) and digital streaming services,” reports eMarketer.
Thank heavens for TV that there is a presidential election this year.
While TV’s hold on the ad market is diminishing, with 36.8 percent of total media ad spending in 2016, it will still hold the largest share out of any media category, though not by much. But digital is banging on the door. Current investments now come in at more than six times the rate of TV, leading eMarketer to surmise that spending on digital will surpass TV in 2017.