The Rise in Digital Advertising

eMarketer estimates overall ad spending in the US will rise 4.9% in 2012, but digital will outperform that: growing 16.6%.

chart_advertisingPageSpending in the digital space remains highly concentrated among select ad formats. Paid search and banner ads will garner nearly 71% of all US online ad spending in 2012. Their share will drop to 64.6% in 2016, as spending on digital video ads accelerates. Video ads currently account for 7.9% of spending—in four years their share will increase to 14.5%.

Digital will be the primary beneficiary of the shift in marketer dollars, but growth will not bypass traditional media completely. While print and directories will see declines, and radio and outdoor only modest gains, TV ad spending will remain robust, at $64.5 billion in 2012. Growth will continue in the coming years, to $73.1 billion by 2016. But in the face of steeper increases in digital, TV’s share of the total will experience a slight decline.

As marketers increasingly adopt multichannel campaigns, digital will emerge as an effective support mechanism for TV, helping TV both stay relevant and become more measurable. A similar dynamic will be evident with radio and outdoor, albeit on a smaller scale. The bottom line: Digital remains in the driver’s seat.

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The Rise in Digital Advertising
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