eMarketer: TV Ad Market Continues to Outpace Digital Video

NEW YORK: Even though digital video advertising in the U.S. is increasing rapidly, TV ad spending will still grow more than digital video in dollar growth in 2014, according to eMarketer.

TV advertising in the U.S. is forecast to reach $68.54 billion, up by 3.3 percent. Digital video ad spending, which is set to increase 41.9 percent this year, will reach $5.96 billion. The uptick in usage on digital devices is an important contributor to growth in ad spending, but by no means will carry enough momentum to overtake the TV market in the near future. eMarketer projects that TV will add more new dollars this year—$2.19 billion more than 2013, compared with a $1.76 billion increase in digital video ad spending. The firm estimates that TV will continue to outpace digital video in dollar growth through 2018. In 2016, for example, projections show TV almost doubling the amount of new dollars going to digital video channels, due primarily to advertising surrounding the U.S. presidential election that year.

“The digital video audience is spread more thinly than a mass television audience, and that segmentation makes digital video ad buys more complex and less reliable than TV advertising,” said David Hallerman, principal analyst at eMarketer. “Time spent with digital video is growing significantly, and it’s taking away some TV time, but given the diversity of placements and platforms, digital video viewers are more difficult for advertisers to target.”

Hallerman added, “Much of the time audiences spend with digital video is not useful for advertisers. Some of that is when they view clips that are either too short or not brand friendly. But it’s also because more and more digital video content is streamed through subscription services such as Netflix or Amazon Prime Video—neither of which supports advertising.”

“As audiences find it easier and easier to watch Internet-sourced content on their TVs, and as more and more content compels them to watch, the connected TV universe will offer marketers a unique blend of digital interactivity and TV’s big-screen power,” said Hallerman.