Zenith Sees U.S. TV Spending Up 2% in 2016

Mobile advertising to grab 52% of Internet spending, overtaking desktop
Author:
Publish date:

Television advertising spending in the U.S. is expected to grow only 2% to $68 billion in 2016, according to a new forecast by media agency ZenithOptimedia.

The gain is small given the boost TV spending traditionally gets in president election and Summer Olympic years.

Overall, ZenithOptimedia forecasts 4.3% growth in ad spending in the U.S. in 2016, up from a 3.7% increase in 2015. For 2017, the agency projects 3.7% growth again.

Mobile advertising accounts for the biggest gains, jumping 34% to 31 billion in 2016. ZenithOptimedia sees mobile accounting for a 52% share of Internet ad spending in 2016, overtaking desktop ads, which will have a 48% share.

Mobile will be the No. 2 ad medium in the U.S. behind television.

The growth in mobile ad spend is being driven by the continued spread of smartphones and tablets, consumers’ rising demand for content delivered by mobile apps, and improved technology for measuring and tracking mobile engagement, the agency says.

“Mobile technology is rapidly transforming the way consumers across the world live their lives, and is disrupting business models across all industries,” Steve King, ZenithOptimedia’s CEO, Worldwide, said. “We are now witnessing the fastest transition of ad budgets in history as marketers and agencies scramble to catch up with consumers’ embrace of the mobile way of life.”

U.S. newspaper revenue will shrink 7% and magazine advertising will drop 1.8%, the agency says.

Worldwide ad spending will grow 5% in 2016, following a 4% gain to $554 billion in 2015, Zenith forecasts. (Zenith’s previous forecast called for 4.2% growth.) Following the Olympic year, ad spending growth will slow slightly to 4.4% in 2017.

The agency noted that marketers have moderated their expectations for global economic growth. Mature markets are bigger contributors to growth with recessions in places like Brazil and Russia, and China’s economy slowing.

Even with China’s economic difficultly, ad growth there will be 7.8% in 2015, nearly twice as fast as the global market, but down the 10.5% gain achieved in 2014.

Related