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Media Ad Spending Up, Sees the Largest Increase in a Decade

Media Ad Spending Up, Sees the Largest Increase in a Decade

By | 07.08.14
Media Ad Spending Up, Sees the Largest Increase in a Decade

New figures just released by eMarketer indicate that total United States media ad spending will experience its largest increase in 10 years.

Total ad investments are expected to increase by 5.3 percent to $180.12 billion based on gains seen in mobile and television advertising. In fact, a 5 percent growth increase is expected for the first time since 2004, which is when ad spending rose 6.7 percent. Mobile will also lead 2014’s increase in total media ad spending in the U.S.; advertisers will spend 83 percent more on tablet and smartphone devices than in 2013, which represents an $8.04 billion increase.

By year-end 2014, mobile will account for almost 10 percent of all media ad spending, which will be greater than newspapers, magazines, and radio for the first time and will also represent the third-largest individual advertising venue. Only TV and desktops/laptops will be greater. TV advertising will rise 3.3 percent, yet advertisers will spend $2.19 billion more on this advertising area than in 2013, which will make it the second-leading category in year-over-year dollar growth, eMarketer indicates.

The gush in mobile advertising is due, in large part, to consumers continually increasing time spent on their tablet and smartphone devices. Based on eMarketer’s most current estimates, adults in the U.S. will spend nearly 3 hours—2 hours and 51 minutes—daily with their mobile devices in 2014. Last year, daily time on mobile devices and on desktops and laptops was equal at about 2 hours 19 minutes; in 2014, desktop and laptop time will drop to 2 hours 12 minutes and mobile time will significantly increase. Meanwhile, TV continues to be the largest venue in which adults spend their media hours, at 4 hours 28 minutes in 2014, continuing to lead as the number one category for advertising spending.

Strong and continued growth in mobile advertising will increase digital ads, which accounts for almost 30 percent of the total U.S. ad spending in 2014. Also, for the first time, advertisers will be spending in excess of $50 billion in digital channels in 2014, representing a rise of 17.7 percent when compared to 2013. A little more than one-third of that originate with mobile; however, by 2018, mobile will total more than 70 percent of all digital ad spending, according to eMarketer. eMarketer explains that the fast-tracked spending increase has been prompted, in part, by increasing revenues from a number of key internet media companies, specifically, those firms that are capitalizing on mobile revenues.

Advertising revenues for some key U.S. digital ad-selling companies will, together, comprise 18.2 percent of 2014’s total media ad spending, according to eMarketer projections. These figures will be led by Google and Facebook. Google accounts for more than 10 percent of all U.S. advertising spending; in 2016, Google and Facebook, combined, will account for a 15 percent share of the $200 billion media advertising market. Facebook mobile ads will total 68 percent of its U.S. ad revenues in 2014, which is an increase of 46.7 percent over 2013, according to eMarketer estimates. Google’s ad revenues in the U.S. are expected to become majority-mobile by 2016 and are showing rapid shifts, today. In 2014, Google’s U.S. mobile revenues will account for 36.8 percent of its overall ad revenues and, by 2016, the medium will represent 65.8 percent.

eMarketer is a research firm, that provides data, insights, and perspectives on worldwide and local economic, technology, and consumer and population trends. Data are derived from research firms, government agencies, media outlets, and company reports and are quantitatively and qualitatively analyzed.

Reference:

eMarketer.com; Total US Ad Spending to See Largest Increase Since 2004; July 2, 2014.

eMarketer.com; Mobile Continues to Steal Share of US Adults’ Daily Time Spent with Media; April 22, 2014.

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