Big Shifts in Media Spending?

$41.8 billion: That’s how much global business advisory firm FTI Consulting Inc. predicts that brands will spend on core online advertising in 2015. (This excludes online advertising revenues captured by traditional media such as magazine, newspapers, and TV broadcast companies.) The firm expects 2015 broadcast ad revenues to reach $38.9 billion this year.

According to its annual U.S. Media Industry Forecast, the firm also forecasts an estimated annual growth rate of 10.3% for digital ad spending through 2018, but only a 4.2% average annual increase over that same time frame for broadcast. This translates to a predicted $55.6 billion in spending on core online advertising and $45.5 billion in spending on broadcast by 2018. Luke Schaeffer, senior managing director and co-leader of the M&E team boldly predicts that if digital spending continues to accelerate, spending on digital video advertising could “eliminate much of the forecasted growth in television advertising over the next five years.”

Based on these estimates, the firm’s Media & Entertainment (M&E) analysts expect core online ad spending to overtake broadcast and direct mail by 2018.The M&E team expects direct mail spending to remain fairly flat, reaching only $44.2 billion by 2018.

Overall, the M&E team predicts that advertising across all media (e.g. digital, direct mail, outdoor, print, and TV) will increase 2.4% this year, representing a slight decline as compared to the 3% growth of 2014. Further, the team forecasts total ad spending to reach about $241 billion in 2018—increasing from approximately $212 billion this year—buoyed in part by political spending in 2016 and 2018.

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