Digital Ad Spending Expected to Soon Surpass TV

For the first time in history, outside of recession years, global television advertising revenue fell year-over-year as digital advertising surged once again. Digital, in fact, should overtake TV by the end of 2017, according to a study released Monday from Magna Global.

In the U.S., digital advertising will surpass TV in 2016.

According to The Hollywood Reporter, a different study from ZenithOptimedia, also released Monday, says TV's share of the advertising pie probably peaked at 39.7 percent in 2012, and it will be overtaken by digital for the first time in 2018.

Both studies paint a rosy picture for digital advertising and a troubling one for traditional cable and broadcast TV, at least in the long term. Many TV cable channels have been losing subscribers lately — including Disney's crown jewel, ESPN, down 7 million subs in two years — while others at Viacom and elsewhere have seen declining ratings.

TV's problems are reflected in falling stock prices, with Viacom, CBS, Disney, Comcast, 21st Century Fox, Time Warner and Sony all down since August, when Wall Street began to worry anew that digital services like Hulu and Netflix and ad-skipping DVRs were taking a toll.

In the U.S., ad revenue will have grown 2.1 percent this year to $167 billion and will grow a healthy 5.2 percent next year, when digital media becomes the No. 1 category with $68 billion in revenue compared with $66 billion for television.

"National television" ad sales will have grown this year by 0.3 percent to $42 billion, according to Magna Global, courtesy of FanDuel and DraftKings, two daily fantasy sports sites that bought a ton of TV, radio, print and digital advertising in the latter half of the year. Next year, national television will fall by the same amount, and the daily fantasy sites will no doubt rein in their spending, given the opinion by some lawmakers that the activity amounts to gambling and should be outlawed, or at least regulated more.

Digital media will have grown 19 percent to $59 billion in North America this year, with the most growth (50 percent) driven by social media followed by video (42 percent growth), according to Magna Global.