NEW YORK: Digital ad spending in the US will rise at a slower annual rate than previously anticipated, new forecasts have indicated.

Digital research firm eMarketer said its revised figures, based on first half data from the Interactive Advertising Bureau and PricewaterhouseCoopers, reflect the fact that this market is maturing more quickly than expected.

Growth rates over the next four years will slow from 13.9% in 2013 to 6.4% by 2016, the report indicated.

In 2012, the market was projected by eMarketer to reach $37.3bn, a 16.6% rise compared to an earlier prediction of 17.7% growth and well down on the 21.7% rise seen in 2011.  

While growth rates may have been scaled back, the overall market will continue to expand to reach $55bn by 2016.

The Big Five digital firms of Google, Yahoo!, Microsoft, Facebook and AOL currently account for two-thirds of digital ad spending. Google, however, with 41.3% of the total in 2012, is far ahead of its nearest rival Yahoo!, which has just an 8.4% share.

Over the next couple of years, Google is expected to further tighten its hold on the market, taking a 43.8% share by 2014. Yahoo!, by contrast, is predicted to continue on a downward trend to a 6.9% share by then, with Microsoft taking over in the number two slot, growing from 6.0% to a 7.2% share.

Facebook continues to grow steadily in fourth place, its current 5.8% share rising to 6.7% in 2014. AOL's 2.5% share will decline to 2.2% over the same period.

Most digital ad spending is focused on search and display, which together take 87.3% of the total in 2012. 

These segments will drive the overall market in the future, growing by 52.5% between 2012 and 2016, by which time they will account for 89.9% of the total.

But display advertising will increase by almost twice as much as search over that time – 68% against 39%. 

Within that total, the most significant growth will come from digital video, forecast to rise 174% and account for almost a third of all display advertising by 2016. 

Data sourced from eMarketer; additional content by Warc staff