Total media ad spending in the US this year will see its largest increase in a decade, according to eMarketer. Total ad investments will jump 5.3% to reach $180.12 billion, achieving 5% growth for the first time since 2004, when ad spending increased 6.7%.
Mobile will lead this year’s rise in total media ad spending in the US, and advertisers will spend 83.0% more on tablets and smartphones than they did in 2013—an increase of $8.04 billion. By the end of this year, mobile will represent nearly 10% of all media ad spending, surpassing newspapers, magazines and radio for the first time to become the third-largest individual advertising venue, only trailing TV and desktops/laptops. Though investments in TV advertising will rise just 3.3%, advertisers will spend $2.19 billion more on the medium than they did in 2013, making it the second-leading category in terms of year-over-year dollar growth.
The surge in mobile advertising is chiefly attributable to the fact that consumers are spending more and more time with their tablets and smartphones. According to the latest estimates, US adults will spend an average of 2 hours 51 minutes per day with mobile devices this year. In 2013, daily time spent on mobile devices and on desktops and laptops was equal, totaling 2 hours 19 minutes, but this year, time with desktops and laptops will drop slightly to 2 hours 12 minutes, while mobile time will increase significantly. TV remains by far the largest beneficiary of adults’ media time, at 4 hours 28 minutes in 2014, hence its persistent lead as the top category for advertising spending.
Strong, steady growth in mobile advertising will push digital ads to represent nearly 30% of all US ad spending this year. Advertisers will invest more than $50 billion in digital channels in 2014 for the first time, an increase of 17.7% over 2013. Just over one-third of that will come from mobile, but by 2018, mobile will account for more than 70% of digital ad spending.
The accelerated rise in ad spending is being influenced in part by growing revenues from leading internet media companies, particularly those that are capitalizing on mobile revenues. eMarketer projects advertising revenues for a handful of the top US digital ad-selling companies, which collectively will represent 18.2% of total media ad spending this year—led by Google and Facebook. Google alone already accounts for more than 10% of all advertising spending in the US, and in 2016, together Google and Facebook will take a 15.0% share of the $200.00 billion total media advertising market. Mobile ads on Facebook will total 68.0% of its US ad revenues this year, up from 46.7% last year, and while Google’s ad revenues in the US won’t flip to majority-mobile until 2016, they’re shifting quickly. This year, Google’s US mobile revenues will comprise only 36.8% of its overall ad revenues, but by 2016, the medium will account for 65.8%.
These forecasts are based on a multi-pronged approach that focuses on both worldwide and local trends in the economy, technology and population, along with company, product, country, and demographic pecific trends, and trends in specific consumer behaviors. Quantitative and qualitative data is analyzed from a variety of research firms, government agencies, media outlets and company reports, weighting each piece of information based on methodology and soundness.