The $600 billion advertising industry, which is growing at 5% rate annually, is undergoing a rapid transition. While TV ads continue to rule the roost with over 40% share, digital ads that include online desktop and mobile ads have taken the center stage and are growing at a rapid pace. According to eMarketer, Mobile advertising is the key driver of growth around the world and advertisers will spend $64.25 billion worldwide on mobile advertising in 2015, an increase of nearly 60% over 2014. So while social media platforms, search engines, programmatic ad platforms and other Internet properties stand to gain from this trend, the clear losers are the TV networks and print media that rely on advertising.
Budget allocation for online ads is increasing at the expense of TV and print media. While budget for TV ads is expected to shrink by 3% each year till 2020, print ad revenue is on a steep decline. World-wide, print ads declined 5.2% in 2014 from a year earlier and are down over 17.5% over the last five years. This leads us to believe that print ads will be relegated to the bottom tier and makeup only a small portion of the ad industry in the future. However, a turf war between TV ads and Online ads will continue in the near foreseeable future. This is a two part article, and in the first part we delve deeper on what’s driving this fundamental shift. In the second part next week, we explore the impact on key industry players.
strategicNovember 23, 2015
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