Digital Ad Spending to Match TV by 2019 as Eyeballs Go Mobile.

http://www.bloomberg.com/news/2014-12-08/digital-ad-spending-to-match-tv-by-2019-as-eyeballs-go-mobile.html

Global spending on digital advertising is forecast to increase 15 percent next year, buoyed by mobile and social media campaigns, and is projected to equal outlays for television by 2019.

Digital expenditures in 2015 will reach $163 billion, or 30 percent of total ad spending, according to Magna Global, a media research unit of Interpublic Group of Cos. In four years, digital will account for 38 percent of global ad outlays, a proportion as large as TV, which has held the biggest share of spending for more than a decade.

The forecast reflects consumers’ shift toward staring at their smartphone screens all day, rather than their televisions, according to Vincent Letang, Magna Global’s executive director for global forecasting. In 2014, global mobile ad spending increased 72 percent, he said.

“This year, next year, if you do the math, almost all the growth is from mobile,” Letang said in a telephone interview. “Especially in the home, for casual users and for entertainment purposes, tablets and smartphones are making great progress.”

TV ad spending is projected to rise 3 percent next year and 6 percent in 2016, New York-based Magna Global said. While TV has been the top medium for ad spending since 1999, when it replaced newspapers, smartphones and tablets have provided features that keep consumers hooked to the devices, Magna Global said. As a result, mobile ad spending has surged.

ZenithOptimedia, a London-based media research group, projects mobile ad spending will increase by an average of 38 percent each year from 2014 to 2017.

Screen Space

Challenging companies is the small screen space on smartphones. Ads can feel intrusive to users, according to a report from ZenithOptimedia. Additionally, mobile phones don’t accept cookies -- data that follow a web user’s browsing history -- making it difficult for companies to determine whether an ad led to a purchase.

That may change as digital wallets, in which people can make purchases using their smartphones, help companies track spending. Social media websites may also serve as a model to companies learning how to advertise on phones.

“Facebook and Twitter have rapidly restructured their operations for mobile consumption and advertising,” ZenithOptimedia researchers wrote. “Their ads are designed to blend seamlessly into the content feed -- they look native rather than intrusive.”

ZenithOptimedia said those two companies will account for one-third of mobile ad spending this year.

“Growth plateaus, which is normal for an emerging format,” Letang said in an e-mail. “What really kick-started mobile advertising on a big scale was the introduction of mobile formats by Facebook in 2012, only two years ago.”

Total ad spending across all mediums is expected to increase by 4.8 percent to $536 billion globally in 2015.