After surpassing money spent on TV advertising last year, digital ad dollars are poised to grow 15.9 percent this year to $83 billion in the U.S., according to the latest data and projections from eMarketer.
The firm expects TV spending to increase 2 percent to $72.72 billion. And with digital video ad spending, eMarketer has this segment pegged to grow 23.7 percent this year to $13.23 billion. The decline in TV ad revenue is driven by changes in consumer behavior.
“This year, U.S. adults will spend an average of four hours and four minutes per day watching traditional TV, a decline of 2.3 percent over last year,” researchers at the firm said in the company’s report.
In regard to video streamed online, known as over-the-top — or OTT — content, viewership is expected to rise. “This year, 193.8 million Americans will watch OTT video content,” eMarketer researchers said adding that nearly 186 million people will watch YouTube, which reflects a 3.2 percent year over year gain. “[And this] year, YouTube will generate $3.5 billion in net ad revenue in the U.S., $7.05 billion worldwide.”
With Hulu, eMarketer is forecasting 32 million viewers this year, which would be a gain of 6.6 percent over last year. Other key findings include a 0.9 percent decline to 201.8 million U.S. adults watching pay TV this year. And the number of U.S. adults “who do not subscribe to traditional pay TV services will jump 20.2 percent to 51 million,” the firm said.
This forecast comes as Google’s YouTube deals with the backlash of advertisers pulling out ad dollars following reports that the channel had failed to control inappropriate content, which may have includes hate speech and terrorism-themed content. Google told jittery advertisers that it was working on the issue, and had put safeguard in place. But analysts expect YouTube to experience a loss in ad spending of between $500 million to $1 billion.