Digital Advertising In the US Is Finally Bigger Than TV and Print

As recent revelations about YouTube suggest, it is not as if the big media platforms have addressed concerns about abuses; it is just that advertisers are bowing to what appears to be the inevitable.

The question is whether regulators and legislators will finally feel compelled to act to stop the concentration and the attendant problems. JL


Kurt Wagner reports in Re/code:

US advertisers will spend more than $129 billion on digital advertising in 2019 — more than the $109 billion they plan to spend on “traditional” advertising. Print advertising will decline by 18%. “Directories,” like the Yellow Pages (are) expected to decline by 19%. Digital publishers that rely on Facebook and Google to distribute their stories (see: BuzzFeed) are also coming to the realization that those two companies aren’t sharing the wealth.

It was inevitable, but it’s finally here: Digital advertising businesses like Facebook and Google will be bigger in the US this year than traditional advertising businesses like TV, radio, and newspapers.

New estimates from eMarketer show that US advertisers will spend more than $129 billion on digital advertising in 2019 — more than the $109 billion they plan to spend on “traditional” advertising.

eMarketer

It would mark the first time ever that the US digital ad business made up more than 50 percent of the market.

The digital ad industry in the US has been growing steadily for years, primarily thanks to two behemoths: Facebook and Google. Even though digital advertising was just half the size of the “traditional” ad industry four years ago in 2015, it was only a matter of time before the two swapped roles.

But this tipping point is also a good reminder of how dominant these advertising businesses like Facebook and Google actually are. Despite a year full of conflict — both companies were called before Congress, both companies are at major risk of regulation both in the United States and abroad — their ad businesses did not suffer. Facebook and Google made up a combined 60 percent of the digital ad industry in the US last year, which equates to roughly $65 billion in revenue.

They’ll lose a little market share this year — eMarketer estimates they’ll combine for 59 percent of the industry in 2019 — but their haul will be even greater: The two are estimated to bring in a combined $77 billion in the US next year.

The losers on the “traditional” side? Newspapers and magazines; eMarketer estimates that “print advertising” will decline by almost 18 percent next year. “Directories,” like the Yellow Pages, will have it even worse. Their print ad revenue is expected to decline by 19 percent.

Print and television aren’t the only industries that have been impacted. Digital publishers that rely on Facebook and Google to distribute their stories (see: BuzzFeed) are also coming to the realization that those two companies aren’t sharing the wealth.

There is some good news for people worried that Facebook and Google are too dominant. Amazon is emerging as a strong third competitor in the market. The company claimed just 1.2 percent of the digital ad market in 2015. In 2019, eMarketer believes Amazon will own 8.8 percent of the market, by far the third-largest player outside of Facebook and Google.

eMarketer