Digital ad spend will snatch most of advertising spend by 2016

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So, you know that digital marketing is increasing almost exponentially year-on-year. You know that only fools don’t use at least one digital marketing channel. You know that multi-channel marketing is the ideal. But do you know just how big digital marketing is going to get?

Forrester Research has released a new report with projections for digital ad spending over the next five years. These figures are based on the US market, but where the US goes others soon follow.

According to the report, online advertising will comprise 35% of total ad spend by 2016. That leaves only 65% to be split between TV, radio and print. It’s not unreasonable to assume that TV will continue to lead radio and print, but it will be interesting to see what the difference will be in five years, especially if the global economy doesn’t pick up soon.

In monetary terms, online advertising spend will reach $77 billion by 2016. As digital marketing comprises numerous channels, Forrester breaks it down for us:

  • Mobile advertising will be the fastest grower, and is expected to reach $8.2 billion in five years’ time. As recent research shows that people are using their tablets more than their phones when it comes to making actual purchases, it might be a good idea for marketers to focus their efforts on tablet devices.
  • Search advertising will still receive the lion’s share of online marketing budgets with a projection of $33 billion by 2016. However, its market share will decrease from 55% in 2011 to 44% in 2016.
  • Social media advertising will only garner 7% of digital marketing budgets by 2016; that’s a relatively low $4.4 billion. Nearly half that of mobile advertising.
  • The current obsession with daily deals is expected to fade as consumers become desensitised to the glut of ads that come their way every day. As a result, Forrester predicts that ad spend will decline in this sector.
  • Display adverts are expected to increase as more marketers make use of rich media options. Video, in particular, is expected to become increasingly popular. Forrester predicts that display ads will capture a significant 37% of digital marketing spend by 2016; this amounts to almost $28 billion.

A report by BIA/Kelsey that looked at small and medium size business (SMB) ad spend shows that these companies will spend approximately $16.6 billion on digital marketing by 2015. This amounts to 70% of their total marketing and advertising budgets.

A report by PricewaterhouseCoopers (PwC) looks at the advertising in the UK and also predicts dramatic growth in the digital marketing sphere by 2015. According to the report, digital marketing spend will increase by 11.2%

All of this serves to underline, highlight and emphasise that it doesn’t matter where you are or how big your business, you need to be online.

(Image by Forrester Research)

 

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