NEW YORK: Digital will become the number one advertising channel in the US within two years according to new estimates, thanks to an improving economy and marketers' greater confidence in digital's effectiveness.
Latest data from Forrester Research indicate that digital adspend will overtake television in 2016 and by 2019 will total $103bn, or 36% of the industry total, while TV spending will in five years will be $85.8bn, or 30% of all advertising expenditure.
"We've landed at a more mature state with digital than we were even in our last forecast where people were still wildly experimental," Forrester analyst Shar VanBoskirk told Advertising Age. "Now for the same reason [marketers] have proven data to grow their budgets, they also have proven data to not overspend."
She expected that budget growth would be largely new money although there would also be some cannibalisation of TV budgets as brands shifted part of their TV spending towards platforms like YouTube and Facebook.
And within digital advertising search will continue to attract the most spending, as marketers are able to measure its benefits, rising from $27.9bn in 2014 to $45.4bn by 2019. Display advertising will hold onto second place, with spending growing from $19.8bn to $37.6bn over the same period.
While social media advertising will grow fastest, from $7.5bn to $17.3bn over the five years, Forrester said that ad measurement in this channel remains problematic.
"Marketers are deliberately choosing tools that are more measurable [than social], that they have more experience with and that have a more obvious direct-response value," said VanBoskirk, adding that they were "still trying to get to the place where they can measure how social media is going to pay off for them".
Email marketing is by far the smallest of the digital channel, projected to be worth $3bn in 2019. VanBoskirk described it as "the workhorse of most marketers' toolkits," but said it was so cheap that it was never going to form a large part of anyone's budget.
Data sourced from Advertising Age; additional content by Warc staff