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Major Milestone: Digital Ad Spending Will Pass Non-Digital This Year

Everyone knew this point was coming. They just didn’t know when. Now we know when: Right now.

In 2019, predicts a new forecast from eMarketer, the digital research firm, digital advertising will surpass traditional for the first time, capturing more than half of all dollars spent by advertisers.

It’s a watershed moment for an industry that has been trending this way for some time. And within just four years, eMarketer predicts, digital spending will make up two-thirds of all ad dollars.

“The steady shift of consumer attention to digital platforms has hit an inflection point with advertisers, forcing them to now turn to digital to seek the incremental gains in reach and revenues, which are disappearing in traditional media advertising,” eMarketer forecasting director Monica Peart said.

This year, advertisers will spend $129.34 billion on digital ads vs. 109.48 billion on traditional advertising, which includes all non-digital options, such as television, magazines and newspapers.

Traditional ad spending will decline from $114.84 billion in 2018 to $104.32 billion in 2021, eMarketer forecasts. During that same period, digital ad spending will soar from $108.64 billion to $172.29 billion.

The shift has been on for a while. Digital, which includes both mobile and desktop web usage, takes up an increasing portion of our lives. The average person spends an astounding four hours every day on their smartphone—and that’s not accounting for the time you browse the internet at work or spend watching Netflix on your Roku.

With every year has come new options for digital activity, and those options include expanded advertising. Advertisers are always eager to find new ways to reach people. They have embraced social media, blogs, over-the-top devices and tablets.

But they only have a finite amount of money to spend on advertising. And so that means that they have to cut back somewhere too.

Magazines and newspapers were the first to suffer major declines in advertising, which began in the mid-2000s but hastened with the start of the Great Recession when overall advertising dropped. Print ads will decline by 17.8 percent this year, eMarketer predicts.

Television had long been the No. 1 advertising medium, but digital surged ahead recently, and eMarketer projects TV ad spending will be down 2.2 percent this year (though it’s a non-Olympic, non-election year, which always hurts).

In fact, the only traditional medium still in the black is out of home advertising, which includes billboards and transit ads. It will be up 1 percent this year—robust growth, by 2019 traditional media standards.

Among the digital ad platforms, Amazon is seeing strong results. Though it ranks No. 3 behind Google and Facebook in digital ad revenue share, its ad business will surge by 50 percent, eMarketer says, and it’s closing the gap with No. 2 Facebook (22.1 percent).

“Amazon has a major benefit to advertisers, especially consumer packaged goods and direct-to-consumer brands,” said Peart.  “The platform is rich with shoppers’ behavioural data for targeting and provides access to purchase data in real-time. This type of access was once only available through the retail partner, to share at their discretion.  But with Amazon’s suite of sponsored ads, marketers have unprecedented access to the ‘shelves’ where consumers are shopping.”

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