U.S. Ad Spending Up 6.3%


Pile of MoneyForecasting firm Magna has good news for the (majority of) media: 2016 is likely to see the biggest increase in U.S. ad spending in six years, according to Ad Age. Having revised its previous forecast and now predicts that ad revenue for the year will grow to $178 billion, which represents a 6.3% increase. That’s the strongest growth since the 6.6% recorded in 2010.

To add some context, if you extract ad revenues associated with this year’s presidential election, as well as the Summer Olympics, then the number is 4.4% — a slight rise over last year’s 4.3% growth.

Certainly the year started well with the first half of the year’s revenue growing by nearly 7% and Q1 boasting the strongest year-over-year growth rate in over a decade. Ad sales were driven by a 4.6% jump in national TV, 18.3% surge in digital media, and 3.8% growth in out-of-home. Print and radio advertising continued to decline 9% and 2%, respectively.

Some disillusion with digital media advertising returns but overall spending didn’t fall in the first half of the year. On the contrary, it rose, along with national TV advertising, at the expense of print and radio.

Overall ad growth is expected to slow in 2017 due to a lack of tentpole events, with Magna expecting a much more modest 1.4% increase for the year. Still, Magna predicted that underlying demand will remain strong. For the first time ever, digital advertising this year will equal TV ad sales, with both generating about $68 billion, according to Magna. Growing at 44%, social media advertising is the biggest contributing factor in digital advertising equaling TV ad sales. By the end of the decade, digital ad sales are expected to reach $105 billion.