According to the Price Waterhouse (PwC) latest annual Entertainment & Media Outlook report, presented by Marketing Charts, with projections for online and offline media advertising markets through 2021, online advertising has already overtaken TV advertising in size, a much more bullish estimate than in last year’s report. PwC says that the online advertising market outpaced TV in 2016 by roughly $15 billion, though last year it had estimated that TV remained larger than online advertising.
Following is a look at some of the highlights for major media markets covered by PwC, ordered by projected size in 2021 and specific to the US. To read more of the detailed report, please visit here.
With a strong 9.9% compound annual growth rate (CAGR) from 2016 through 2021, online advertising will be a $116 billion market by end of the forecast period, per the report. That would make it more than 50% larger than the TV advertising market at that point, says the report.
Mobile’s share of online ad spend is expected to grow throughout the forecast period, and has changed quite dramatically. Whereas last year, PwC’s forecast was expecting mobile to grow to a 40% share of online advertising in 2020, it has revised that estimate to show mobile exceeding “wired” internet advertising last year.
Among mobile advertising types, display (including video) is now expected to be slightly smaller than search throughout the forecast period. Search is predicted to inch up from 50.1% of mobile ad spending this year to 52% in 2021. Mobile video will be the fastest-growing segment, with its 2016-2021 CAGR of 31.2% bringing it almost on par with other mobile display advertising formats by 2021. Overall, mobile advertising is projected to grow by an annual average of 18.7% from 2016 through 2021.
TV advertising spending is projected to grow slowly from $71 billion this year to $75 billion in 2021, says the report, at which point it will occupy 38.8% share of the advertising market.
Overall, TV will grow at a compound annual rate of 1.3% from 2016 through 2021, a much lower 5-year forecast than issued last year (3.2%), due in part to declining TV viewing, a trend more exacerbated by youth and thus expected to continue if not pick up in the years to come, says the report.
The 5-year CAGR for online TV advertising is slowing also: at 7.4% this year, it is below the forecasts issued last year (8.9%) and the year prior (14.4%). Cable networks are forecast to see a higher advertising CAGR (2.9%) than broadcast networks (1.0%), with the former extending its lead in ad dollars over the forecast period.
The consumer magazine advertising market in the US has estimated value of $16.6 billion this year, and will remain essentially flat through 2021 ($16.7 billion). Growth in digital advertising (2016-2021 CAGR of 13.1%) will be just enough to offset declining print revenues (CAGR of -9.7%). Digital advertising is projected to overtake print advertising as the leading source of consumer magazine advertising revenues in 2020 ($9 billion and $7.6 billion, respectively).
The trade magazine market is smaller, but following similar trends. The advertising market for trade magazines is expected to remain mostly flat ($4.4 billion this year and $4.5 billion in 2021), with digital (CAGR of 10%) just making up for print’s losses (CAGR of -7%). As with consumer magazines, PwC predicts that digital will overtake print in trade magazine ad spend in 2020.
The radio advertising market in the US is expected to remain relatively flat through 2021 alongside resilient consumption and growing reach, says the report.
The radio ad market will increase marginally from $18.2 billion this year to $19.1 billion in 2021. Radio advertising is predicted to have a 2016-2021 CAGR of 1.2%, excluding satellite radio advertising, which represents just a fractional share of total radio advertising.
Terrestrial radio online advertising will be the fastest-growing segment, with a CAGR of 8.6%. However, as with TV (and unlike print and out-of-home), digital ad revenues will represent just a small portion of overall radio revenues. Forecast to comprise 8.2% share of total radio ad revenues this year, online radio is projected to grow to 10.7% share of radio revenues by 2021.
The hardest hit of the media types examined, newspaper advertising is the only market expected to see a decline in revenues between this year ($16.8 billion) and 2021 ($12.2 billion).
Forecast to account for 29.8% of newspaper ad revenues this year, says the report, digital is expected to grow to 44.6% share of revenues in 2021. Meanwhile, each of the three major segments of print advertising (classified, national and retail) is predicted to drop by an annual rate in the double digits, with classified having the worst outlook (of -13.3%).
Out-of-home (OOH) advertising has the strongest prognosis of the traditional media types, though its healthy outlook is mostly the result of healthy projected growth in digital out-of-home advertising, says the report. Overall, OOH ad revenues are predicted to grow from $9.2 billion last year to $11 billion in 2021, with a 2016-2021 CAGR of 3.7%.
The smallest medium of those identified in this article, cinema advertising is predicted to grow from $881 million this year to $965 million in 2021, with a 2016-2021 CAGR of 2.4%. Cinema advertising revenues will continue to be dwarfed by box office revenues, which are expected to grow at a 1.2% annual clip from 2016 ($10.6 billion) through 2021 ($11.2 billion).
Copyright 2017 MediaPost Communications. All rights reserved. From http://www.mediapost.com.
By Jack Loechner, Staff Writer.
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