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Traditional Media Ad Spend Dips Lower as More Dollars Shift to Digital

B2C products expected to see highest growth in ad spend

The shift from traditional media ad spending to digital continues unabated. That’s according to a Duke University Fuqua School of Business survey of US marketers commissioned by the American Marketing Association (AMA) and conducted in February 2013.

As recently as August 2011, marketers expected traditional ad spending to increase incrementally over the following year. But by February 2012 they began to project that traditional ad budgets would shrink, and in February 2013 the expected size of that decline over the next 12 months reached 2.7%.

Meanwhile, digital marketing investment will expand at the expense of traditional spend. The increase in digital ad spending was projected to be most dramatic in the business-to-consumer (B2C) product category, which was expected to se a 14.6% bump over the 12 months following February 2013. B2C and business-to-business (B2B) services were forecast to see similar increases in digital ad spending.

B2C services were estimated to experience the greatest drop in traditional media ad spending, falling 5.4% over the next year.

The data showed a general decline in the proportion of company revenues going to marketing spending. The B2C products category was expected to command the greatest amount of marketing spending (9.4%) as a share of company revenues in February 2013, followed by B2C services (9.2%), B2B products (8.8%) and then B2B services (7.7%). Marketer attention seems to have shifted away from B2C services, for which spending as a percentage of revenues dropped almost 7 percentage points since August 2012.

eMarketer foresees continued growth in digital ad spending in the US, with budgets totaling $42.5 billion in 2013 and increasing to $60.4 billion in 2017. While growth in digital ad spending will decline over that period, digital will continue to account for an ever-larger portion of total media ad spending, according to eMarketer projections.

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Check out today’s other articles, “How Does Wi-Fi Affect Mobile Shoppers?” and “Consumers in Germany Resist Brand Social Content, but Are Persuadable.”

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