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TV Ad Dollars to Outpace Digital Video 6-to-1

18 Jun, 2014 By: Doug McPherson

NEW YORK – Despite the huge growth of digital video advertising in the U.S., TV will add more new dollars this year – $2.19 billion more than 2013, compared with a $1.76 billion increase in digital video ad spending last year over 2012, says eMarketer.

What’s more, the company estimates TV will continue to outpace digital video in dollar growth through 2018. In 2016, for example, eMarketer projects TV almost doubling the amount of new dollars going to digital video channels, due chiefly to advertising surrounding the upcoming U.S. presidential election that year.

Still, digital video ad spending will increase 41.9 percent this year, reaching $5.96 billion, while TV advertising in the U.S. will grow 3.3 percent to hit $68.5 billion.

eMarkerter says the uptick in usage on digital devices is an important contributor to growth in ad spending for these sectors, but by no means will carry enough momentum to overtake the TV market in the near future.

David Hallerman, principal analyst at eMarketer, says the digital video audience is “spread more thinly” than a mass television audience, and that segmentation makes digital video ad buys more complex and less reliable than TV advertising.

“Time spent with digital video is growing significantly, and it’s taking away some TV time, but given the diversity of placements and platforms, digital video viewers are more difficult for advertisers to target,” Hallerman says.

He also added that much of the time audiences spend with digital video is not useful for advertisers. Some of that is when they view clips that are either too short or not brand friendly. But it’s also because more and more digital video content is streamed through subscription services such as Netflix or Amazon Prime Video – neither of which supports advertising.

Overall, eMarketer estimates that online video ad spending (spending primarily on desktop-based ads) will total $4.52 billion in 2014, or 75.8 percent of digital video ad spending, versus $1.44 billion for video ad spending on tablets and smartphones. By 2018, those figures will converge, when online will still slightly outspend mobile video – $6.64 billion to $6.07 billion.

Video ad spending on connected TVs – devices such as set-top boxes, smart TVs and gaming consoles – is accounted for in the online portion of video ad spending in eMarketer’s definition, which partially accounts for the growth there in contrast to our mobile category. As desktop advertising declines in favor of tablet and smartphone advertising, connected TVs will help pick up slack in the online category.

“As audiences find it easier and easier to watch Internet-sourced content on their TVs, and as more and more content compels them to watch, the connected TV universe will offer marketers a unique blend of digital interactivity and TV’s big-screen power,” Hallerman added.

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