A new world of channel hopping as digital advertising overtakes TV
15 Jun 2017
Television has for many years been the established and most popular way of reaching consumers through original, compelling ads—particularly those featured during key sporting events, for example. But as digital technology continues to disrupt the status quo, the primacy of television advertising spending is being challenged.
Digital takes pole position
Dentsu Aegis Network’s latest ad spend forecasts suggest that digital will be the top media in terms of global share of spend in 2018, taking over television for the first time (see chart). Reflecting the increased consumer use of digital media, particularly through mobile phones, digital’s share of total media spend is predicted to reach a 37.6% share in 2018 (up from 34.8% in 2017), versus 35.9% for television (down from 37.1% in 2017), amounting to a total value of US$215.8 billion. Television will become the latest media to be overtaken by digital in terms of ad spend, following out-of-home in 2006, radio in 2007, magazines in 2009 and newspapers in 2012.
How does this global picture vary around the world? Digital is predicted to be the number one ranking media type in 21 out of the 59 markets analysed in 2018 with Finland, Switzerland and Taiwan newly joining this list. In the United States, this ‘crossover year’ will actually occur between 2019 and 2020, according to our forecasts, as television remains a key driver of advertising spend. Digital’s share of advertising spend in 2018 is forecast to exceed 50% in 8 out of the 59 markets analysed (Australia, China, Denmark, Netherlands, New Zealand, Norway, Sweden and the United Kingdom). Some markets, of course, will remain loyal to television—in Brazil, for example, TV culture is extremely strong and will help see television account for 65% share of total advertising spend.
TV down, but not out
Despite this changing of the guard, television will remain an important part of the advertising mix. Our 2018 forecasts suggest that advertising expenditure will be buoyed in 2018 by key events such as the Winter Olympics & Paralympics in South Korea, the FIFA World Cup in Russia and the US Congressional elections—all events where television will for the majority of people be the primary channel.
However, brands by necessity will have to adapt to how we watch television today, which is often as part of a multi-device experience. For example, Google research shows that three-quarters of UK consumers use a connected device (most likely a smartphone) while watching TV. And research into mobile usage during the 2017 Superbowl showed a few minutes into the game, mobile usage jumped almost 30 percent and stayed at that level.[i] For most consumers, using social media to discuss TV events in real time augments the experience, rather than detracting from it.
So while there may be challenges ahead for the venerable television, it’s not time to switch off the box just yet…