Los Angeles — Online advertising will account for
more than half of all US advertising sales in 2018, according to a
study, surpassing $100bn for the first time and marking a milestone in
the shift of money, time and attention to the internet from older media.
Having already exceeded the combined ad sales of print, radio and TV,
online advertising in the US will increase 16% to $106.6bn, researcher
Magna Global said in a report on Thursday. Led by Google and Facebook,
the growth will boost the overall US advertising market to a record
$207bn in 2018.
Alphabet, parent of Google and YouTube, and Facebook account for most
online ad sales and show little sign of slowing down. Ad revenue from
web searches, dominated by Google, grew 18% in the second quarter, Magna
said.
Ad sales on social networks, led by Facebook, jumped 36%. Amazon.com
has also emerged as a recipient of ad dollars, with projected revenue of
$4.61bn, according to EMarketer.
Digital growth
Some of this digital growth is coming at the expense of TV, once the
dominant medium for advertisers. National TV ads will rise 0.8% in 2018,
Magna said, but only thanks to events that do not occur every year,
such as the Olympics and US midterm elections. Excluding political ads,
local TV sales will be down more than 4%.
The audience for major TV networks has been declining as more viewers
waited to watch shows on-demand or abandoned conventional TV for
streaming options such as Netflix and Hulu. TV networks have managed to
stave off revenue losses by charging higher prices for their ads,
avoiding the painful declines seen in radio and print.
But even that strategy is starting to falter. TV ad sales have
declined in seven of the past eight quarters and are forecast to retreat
for many years.
"A growing number of brands are being priced out of prime-time or
network TV," said Vincent Letang, an executive vice-president at Magna.
Internet companies have positioned themselves to siphon even more ad
dollars from TV by investing in video. Google owns the world’s most
popular advertising-supported video site in YouTube and Facebook.
Sales for advertiser supported video on the internet climbed 28% in
the second quarter and should eclipse both print and radio advertising
by 2019, Magna said.
Bloomberg
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