US Ad Spending 2018: Updated Forecast for Digital and Traditional Media Ad Spending

US Ad Spending 2018: Updated Forecast for Digital and Traditional Media Ad Spending

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Executive Summary

Ad spending on digital media is expected to overtake traditional media in 2019. Digital ad investments exceeded expectations during H1 2018 and will now reach $111.14 billion by year’s end, above our March 2018 estimate of $107.30 billion. By 2019, digital media will account for 55.0% of total media ad spending.

A surge in search ad spending is behind the revision to digital advertising, with projections rising from $45.81 billion to $48.49 billion. Search’s growth is mainly attributable to Google, which accounts for 71.0% of the US search ad market. Google’s search ad revenues overperformed during the first half of 2018 as advertisers—especially local advertisers—increased investment in mobile search advertising.

Google’s net search ad revenues will total $34.42 billion in 2018, a 19.4% increase over 2017. The company will maintain double-digit growth into 2020, when its total ad revenues will represent over one-fifth of total media ad spending.

Display ad spending will reach $57.42 billion in 2018, or $1 billion ad dollars more than previously expected. Facebook’s ad revenues of $22.87 billion drove growth, beating previous expectations of $21.00 billion. Negative press coverage surrounding the Cambridge Analytica scandal and teens exiting the social network has had little impact on ad revenues. Facebook reported in its Q2 earnings that the average price per ads and volume of ads delivered grew during H1 2018. With this boost in Facebook’s ad revenues, for the first time, it will account for 10% of total media ad spending this year.

 

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