This year, the money spent on digital advertising in the US will surpass that on traditional ads for the first time. Photo: File
INTERNATIONAL - This year, the money spent on digital advertising in the US will surpass that on traditional ads for the first time, according to forecasts by eMarketer, representing a landmark inversion of how advertisers budget their resources and highlighting the rise of digital media as platforms to seek consumers’ attention.

By the end of the year, eMarketer expects companies to spend nearly $130 billion (about R1.84 trillion) on digital ads, compared with about $110 bn on traditional advertisements, or about 54.2% of the ad market versus 46.8%, respectively.

According to the research firm’s projections, spending on digital ads will continue to outpace that of traditional ads. By 2023, digital ads will capture more than two-thirds of all ad spending, according to the estimates.

The increase in digital ad dollars will come, in part, from sharp declines in key print ad formats including directories such as the Yellow Pages, whose ad spending will fall by 19%, and the print versions of newspapers and magazines where ad spending is expected to decrease by about 18%, eMarketer said.

Ad spending on TV will decline 2.2% this year, to about $71bn, eMarketer said, owing largely to the absence of elections and big sports events, such as the Olympics or World Cup.

“The steady shift of consumer attention to digital platforms has hit an inflection point with advertisers, forcing them to now turn to digital to seek the incremental gains in reach and revenue which are disappearing in traditional media advertising,” eMarketer’s forecasting director Monica Peart said.

The top two digital advertisers in the US - Google and Facebook - are expected to maintain their dominant hold on advertising dollars, as the tech giants’ combined ad revenue will command about 59% of the market, according to the forecasts. EMarketer projects Google’s share will drop slightly from 38.2% to 37.2%; Facebook’s share is expected to remain “virtually unchanged”, rising by less than half of a percentage point from 21.8% to 22.1% this year.

While Facebook is negotiating with the Federal Trade Commission over a multibillion-dollar fine tied to its privacy practices, the company’s market share increase will be driven by Instagram, eMarketer said.

“There’s strong demand for ads in Instagram Stories, and Instagram still benefits from the perception that it’s less impacted by the challenges core Facebook has faced,” eMarketer analyst Debra Aho Williamson said.

Amazon, Microsoft and Verizon round out the top five digital advertisers.

Amazon’s advertising business is projected to grow by more than 50% in 2019, claiming a total of nearly 9% of the digital ad market. 

- The Washington Post