Commentary

Digital Video Ad Spend Still Growing, But Will Level Out

Digital video advertising remains on a fast track for growth, but its trajectory is slowing. That’s not a surprise, per se, given how quickly this segment rose over the last decade. Nevertheless, a new study from eMarketer shows how U.S. digital video ad spend will likely play out in the next four to five years.

Growth will remain in the double digits for digital video through 2020 when it will hit nearly $17 billion. That’s up from $9.8 billion this year, which is nearly double the $5.24 billion haul in 2014. In the next few years, the industry will see a natural leveling out, with growth at 28.5% this year, 19.2% next year, 14.2% in 2018, then 13% and 10% growth in 2019 and 2020 respectively.

As a vastly more mature medium, TV ad spend is slated to grow at 2% to 2.5% each year and will reach $77 billion in 2020.

Other studies peg U.S. digital video’s 2020 ad spend as bigger. Investment firm Cowen and Company predicts digital video will pull in $28 billion at that time.

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Bear in mind that programmatic video is driving a large portion of the continued growth. In fact, the Interactive Advertising Bureau said in a report that programmatic video will generate 41% of the digital video ad spend this year, and has been growing at 58% for the last two years.

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