Commentary

Internet U.S. Ad Spend Will Top TV In 2017, Says PwC

by P.J. Bednarski , Staff Writer, June 9, 2016

For the first time next year, online advertising in the U.S. will surpass TV, according to a new Pricewaterhouse Coopers report.

But online’s victory in 2017 will be just by a nose, relatively: $75.3 billion for online, and $74.7 billion for the slackards in the TV business.

By 2020, Internet advertising will bring in $95.3 billion and TV ads $81.7 billion in the U.S.

Streaming services and other online video will grow from $6.4 billion business in 2015 to $10.4 billion by 2020.

But pay TV ought to be a flat business by 2020 as consumers look for, and find, alternatives.

Overall, things are slowing a bit in the entertainment and media sector in the U.S. Between 2015 and 2020, it will grow by a compounded rate of 3.7%. Globally, the increase will be 4.4%, which PwC notes, outpaces global growth in 36 of the 54 nations it's studied.

There doesn’t seem to be a stand-out stat in the PwC Outlook that would either have you break into a dance or drive your car into a wall, except for the one that says online will beat TV next year. What’s been going up, and down, will continue to do so.

Some of PwC’s observations seem particularly risk averse, such as: “Today’s and tomorrow’s definition of what it means to be a ‘media company’ will continue to evolve, as companies -- not just entertainment and media companies -- invest in content and direct customer media relationships.”

Thanks for that. We've noticed.

And then there is: “U.S. Internet advertising revenue will continue to surge forward, with mobile seeing the most rapid growth--all forms of mobile advertising will continue to grow in the coming years,” the report says, echoing other studies.

PwC predicts that by 2020, mobile will account for nearly half the total online advertising, up from about a third. That’s an interesting stat, given that in the U.S., the general belief is that mobile is done growing its base of users, so from now on, the growth is purely from increased use and rates, not simply adding new bodies.

“One key driver is the shift in search from laptops to mobiles, with mobile paid search Internet advertising having seen tremendous recent growth, ” PwC says.

Internationally, the U.S. is still the big driver. Its 2015, advertising revenue of $59.6 billion is more than twice what China generates, and that’s the second largest market.

PwC cautions that Internet advertising’s growth could be impeded. “There are some headwinds brewing,” PwC says, ”triggered by challenges such as transparency, ad fraud, and privacy.”

pj@mediapost.com

advertising, international, marketing/branding/advertising, online, research

4 comments about "Internet U.S. Ad Spend Will Top TV In 2017, Says PwC".

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Ed Papazian from Media Dynamics Inc, June 9, 2016 at 2:05 p.m.
And once again, I point out that this is meaningless information. In short, so what? When it comes to branding ad campaigns, digital is still an also ran to TV and by a huge margin.
Reply

pj bednarski from Media business freelancer replied, June 9, 2016 at 3:10 p.m.

I agree to a point that comparing media is sometimes hollow. But a branding campaign is just one type of campaign, so it's not totally meaningless, in my opinion. And if you note the trend of ad sales, it's not irrelevant to point out one kind is rising while other kinds are not. For example, you don't see radio mentioned in research like this most of the time. Once, you did.

Rod Ellis from Adams Outdoor Advertising , June 9, 2016 at 9:01 p.m.

Yes, it's interesting that the conversation is always one over the other. Campaigns work as companion pieces, not as one offs. Many agencies have no idea how to work media together and build campaigns so the client sees these articles and automatically asks their agencies to focus more on digital. The "ad agency" hires a digital agency and everyone heads down the rabit trail to ripping off clients.

Ed Papazian from Media Dynamics Inc, June 10, 2016 at 7:30 a.m.

PJ, the implied message---not yours, but theirs'-----is that advertisers should go where the "spending" is going, which is why I react so strongly to pronouncements such as these. Such data may sway direct response marketers---though I would hope not---but it has little or no meaning for any sensible branding advertiser.