Despite Concerns, Marketers to Drive 21% Increase in Digital Ad Spending

Fri Sep 29, 2017

Kathy Crosett

After issuing a forecast in August, Brian Wieser is back with his projections for how the ad market will digitalfinish up in 2017. The anticipated 4.4% rise in ad spending will largely be driven by digital which will experience a 21% boost this year. There are warning signs, however; that marketers are growing less content with digital.

Wieser breaks the ad market into three broad categories:

  • National: $73,900 billion for mass advertising, which reflects a 1% increase over last year
  • Local: $57,270 billion, which is a 3% decrease from last year
  • Direct and SMB: $78,692 billion, which is a 14.3% jump over last year

In total, the normalized ad spend for 2017, without political or Olympic activity, will be $210,398 billion.

National

The national TV category will experience a 1.9% drop this year, and amount to $44,330.7 billion. The only format in that category to grow will be national syndication and long-form pro video, at 0.6%. However, the format only accounts for 6% of total national TV.

The other parts of national ad market break out as follows. Most of these numbers reflect a drop in spending when compared to 2016. The exceptions are video and network and satellite radio with growth rates of 41.8% and 1%, respectively.

  • National cable $25.76 billion
  • National broadcast English $14.49 billion
  • National broadcast Spanish $1.4 billion
  • Magazines $7.275 billion
  • National digital display $7.8 billion
  • Video Excluding long-form $12.185 billion
  • Network and satellite radio $1.2 billion
  • National newspaper $406 million
  • Cinema $651 million

Local

Wieser separately categorizes mass media spending at the local level. While some of these categories will experience drops this year, others will see increased demand. Local cable TV advertising will enjoy a 0.5% growth rate. Marketers continue to place more money in the outdoor format, which will grow by 0.5% as well. And, not surprisingly, local digital advertising will increase: by 8.9%. In total, though, local advertising as measured by Wieser will drop 3%.

  • Broadcast TV $15 billion
  • Cable TV $4.8 billion
  • Newspaper $9.9 billion
  • Radio $12.586 billion
  • Outdoor $7.087 billion
  • Digital $7.847 billion

Direct and SMB

The direct and SMB advertising category, valued at $78,692.5 billion for 2017, will be 14.3% higher than it was last year. Direct mail and directory spending will drop this year, while paid search and other direct online will enjoy higher demand. The numbers break out as follows:

  • Paid search (including mobile) $40.9 billion
  • Other direct online $17.982 billion
  • Direct mail $18.958 billion
  • Directories $833 million

In looking to the future, Weiser points out that some large marketers are questioning the value of online ad spending. Specifically, P&G cut a significant amount of digital ad spending this year. Restoration Hardware has cut back on buying keywords for search. And, Uber “eliminated spending on app installs earlier this year.” With these well-known brands reporting “no negative business impact” from these changes, it’s worth questioning whether other marketers will take similar steps.

Reps, share these trends with your clients and suggest that they take another look at the formats they are buying.

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About Kathy Crosett

Kathy is the Research Director for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel.

View all posts by Kathy Crosett
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