Performance marketing insights, discussions and expertise

When will internet advertising overtake TV?

By on June 17, 2014

Q1 Internet Advertising Spend increases 19% Year-over-Year to $11.6B

$11.6B

Internet ad spend in the U.S. reached a record $11.6 billion for the first quarter of 2014, according to the Internet Advertising Revenue (IAB) Report released last week.

“Interactive advertising is seeing remarkable gains,” said Randall Rothenberg, President and CEO, IAB. “Digital screens are a critical part of the marketing mix and these landmark figures speak to that irrefutable fact.”

David Silverman, a partner at PwC US, bolstered this view, saying, “With consumers increasingly relying on digital screens for everything from information to entertainment, numbers like these should come as no surprise. Interactive clearly offers a unique proposition for marketers and agencies – an opportunity they are embracing and will likely rely on more in the future.”

The chart below illustrates this powerful growth trend since 1996:

Quarterly Revenu Growth

The question on my mind today is:  When will digital ad spend finally overtake TV?

The answer is that it’s likely to take a while. According to the eMarketer prediction made last year, this milestone should be reached at the end of this decade. I think it’s going to be sooner, however, as they are under-estimating the impact of digital subscription services like Netflix and Amazon Prime. While TV ad spend continues to grow, it is at the anemic rate of 3.7% vs the 19% growth explosion we just saw in digital.

Therefore, my prediction is that digital will sustain the same compounding growth rate, and will surpass TV by 2017. The television advertising behemoth will lumber on for decades, but a new king is about to be crowned.

Whether this coronation occurs in three years or in seven, these are very exciting times for everyone in digital advertising.

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