Digital Ad Spend Will Surpass TV By 2017

MAD MediaPost Agency Daily

• by Steve McClellan, 6 hours ago
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Global Digital advertising expenditures will surpass TV spending by 2017 -- and the phenomenon is already occurring in some of the world’s largest ad markets.

Speaking at an investor conference last week, Interpublic Group CEO Michael Roth noted that company research shows that one-third of all ad expenditures are currently allocated to digital.

Roth said that IPG’s research and marketplace intelligence unit Magna Global is predicting that by 2017, more dollars will be allocated to digital than TV.

And in China, where spending growth remains in double digits for the foreseeable future, digital ad expenditures will surpass TV this year, according to a just released GroupM forecast for the country.

TV spending in the country is projected to total $36 billion this year, representing 47% of ad spending. That said, the GroupM report notes that “TV still holds a dominant place among all forms of media in terms coverage and influence.”

For example, GroupM reported that 45% of the top 10 “hot topics” on Chinese social network Sina Weibo were “inspired by TV programs,” through the first four months of 2014.

Last month during a WPP conference call with analysts, the holding company’s chief forecaster Adam Smith was asked if the marketplace had reached an “inflection point,” that signaled a much steeper decline in the amount of TV ad spending globally. Smith replied, “not like print, but we are managing a transition. It’s more of a slow burn thing,” with TV.

IPG’s Roth, speaking at a Goldman Sachs conference last week, agreed. “There’s no big bang, if you will,” he said.

And he also agreed with Smith that it’s more about managing a transition, which is why IPG is embedding digital across its offering. “There’s no uber digital capability,” he said. Rather, “we are making it a part of the DNA of all of our agencies. It’s a part of everything we do.”

And the flip side to that is that shops like RG/A, which started as pure digital operations are morphing into full-service units. RG/A for example, created a Super Bowl commercial for audio gear marketer Beats earlier this year. “They’re no longer viewed as just digital,” said Roth or RG/A.