US Spending on Paid Media Expected to Climb 5.1% in 2016 - eMarketer

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US Spending on Paid Media Expected to Climb 5.1% in 2016

Ad spending is driven mainly by digital media

March 25, 2016

2016 will be a challenging year for advertising in the US. Although paid media spending will rise by 5.1%, growth will be slower than previously expected as advertisers pare investments on traditional media formats like TV and radio. eMarketer estimates US total media ad spending will top $192 billion for the year, partly driven by the US presidential election and the Rio Summer Olympics, as explored in a new eMarketer report, “US Ad Spending: eMarketer's Estimates for 2016.”

US Total Media Ad Spending Share, by Media, 2015 & 2020 (% of total)

Conditions in the US have become less supportive for economic growth this year, leading to weaker estimates than previously expected. A strong dollar, global market fluctuations and plunging oil prices are contributing to the strain on the economy. Because of this, eMarketer has lowered its expectations for total ad spending growth for the entire forecast period.

Additionally, the outlook for TV advertising growth is lukewarm, rising at a pace of just 2.5% this year. Traditional TV ad sales will have a challenging year ahead as a result of declining viewership and increased competition from video-on-demand (VOD) and digital streaming services.

eMarketer has lowered its expectations for TV ad expenditures for the entire forecast period, as advertisers pull back on investments. Still, in 2016, TV will benefit from advertising around the US presidential election and the Rio Olympics, which will keep ad dollars trending in positive territory.

US Total Media Ad Spending, by Media, 2015-2020 (billions)

TV’s hold on the ad market is diminishing. Capturing 36.8% of total media ad spending in 2016, it will still hold the largest share out of any media category, though not by much. Digital will fall short, with a share of 35.8% in 2016, but with investments pouring in at more than six times the rate of TV, eMarketer predicts spending on digital to surpass TV in 2017.

In all, digital media ad spending, which includes mobile, is surpassing all expectations. Outlays will jump 15.4% in 2016 to $68.82 billion, accounting for 35.8% of total media ad investment. By 2020, digital ad spending will reach $105.21 billion, growing its share of total media spending to 44.9%. eMarketer has increased its projections for total digital ad spending in 2016 due to mobile ad dollars rising at a faster rate than previously expected.

Get more on this topic with the full eMarketer report, “US Ad Spending: eMarketer's Estimates for 2016.”

eMarketer releases over 200 analyst reports per year, which are only available to eMarketer corporate subscribers.


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