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U.S. Ad Spending Sees Largest Spike in Decade

9 Jul, 2014 By: Doug McPherson

NEW YORK – Total media ad spending in the United States this year will rise 5.3 percent to reach $180.1 billion, achieving 5-percent growth for the first time since 2004, when ad spending increased 6.7 percent, eMarketer predicts.

Analysts say gains in mobile and TV advertising will sput the spike. Mobile will lead this year’s rise in total media ad spending, and advertisers will spend 83 percent more on tablets and smartphones than they did in 2013—an increase of more than $8 billion.

Before 2015, mobile will represent nearly 10 percent of all media ad spending, surpassing newspapers, magazines and radio for the first time to become the third-largest individual advertising venue, only trailing TV and desktops/laptops.

TV advertising will rise just 3.3 percent, but advertisers will spend $2.2 billion more on the medium than they did in 2013, making it the second-leading category in terms of year-over-year dollar growth.

The surge in mobile advertising is coming from consumers spending more time on their tablets and smartphones. eMarketer predicts U.S. adults will spend an average of 2 hours 51 minutes per day with mobile devices this year. In 2013, time on desktops and laptops totaled 2 hours 19 minutes, but this year, time with desktops and laptops will drop slightly to 2 hours 12 minutes, while mobile time will increase significantly.

Other findings include:

  • TV remains by far the largest beneficiary of adults’ media time, at 4 hours 28 minutes in 2014, hence its persistent lead as the top category for advertising spending.
  • Steady growth in mobile advertising will push digital ads to represent nearly 30 percent of all U.S. ad spending in 2014.
  • Advertisers will invest more than $50 billion in digital channels in 2014 for the first time, an increase of 17.7 percent over 2013. More than one-third of that will come from mobile, but by 2018, mobile will account for more than 70 percent of digital ad spending.
  • The faster rise in ad spending is being influenced in part by growing revenues from leading Internet media companies, particularly those capitalizing on mobile revenues.
  • Ad revenues for some of the top U.S. digital ad-selling companies will represent 18.2 percent of total media ad spending this year – led by Google and Facebook. Google alone already accounts for more than 10 percent of all advertising spending in the U.S., and in 2016, Google and Facebook together will take a 15-percent share of the $200 billion total media advertising market.
  • Mobile ads on Facebook will total 68 percent of its U.S. ad revenues this year, up from 46.7 percent last year.

While Google’s ad revenues in the U.S. won’t flip to majority-mobile until 2016, they’re shifting quickly. This year, Google’s U.S. mobile revenues will comprise only 36 percent of its overall ad revenues, but by 2016, the medium will account for 65.8 percent.

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