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The US media and entertainment industries will spend a combined $7.34 billion on paid online and mobile media advertising in 2016. eMarketer expects this investment to grow to $11.52 billion by 2020. As digital consumption of news and entertainment increases, advertisers in these sectors are spending larger portions of their advertising and promotional budgets on online and mobile channels, as explored in a new eMarketer report, “The US Media and Entertainment Industries 2016: Digital Ad Spending Forecast and Trends.”
US media industry digital ad spending will reach $4.05 billion in 2016, up from $3.45 billion in 2015. Growth rates will begin to slow starting in 2016 and taper off to 9.5% by 2020. As a percentage of total US digital ad spending, media will hover around 5.8% throughout the forecast period.
Much is the same in the US entertainment industry, which will see steady but slowing growth in digital ad spending through 2020. Entertainment advertisers will spend $3.29 billion on digital ads in 2016, accounting for 4.8% of all US digital ad spending for the year. Entertainment’s share of total digital ad spending will remain relatively constant, inching up to 5.2% by 2020.
Compared to other industries tracked by eMarketer, media and entertainment spend the least on paid digital media, with the exception of healthcare and pharma. Media companies, many of which operate high-ranking news sites or search engines, have the unique ability to place ads for their own products and services on properties they own. An AOL survey conducted in August 2015 in partnership with Advertiser Perceptions found that owned and operated sites were widely used by US publishers to distribute branded video content. The ability to place ads on their own sites allows media companies to keep ad spending low.
Digital ad spending for both the media and entertainment industries will experience healthy compound annual growth rates between 2015 and 2020. The media business is forecast to see a CAGR of 12.0% between 2015 and 2020, while entertainment is expected to record a 13.8% CAGR.
eMarketer corporate subscription clients can view the full report here.
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