Digital-Video Advertising in U.S. to Hit $6 Bil in 2014, But It’s Not Displacing TV Dollars

Even with rapid growth of online-video ad market, TV is forecast to outpace digital in actual dollars: eMarketer

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Ad spending on digital video will increase 41.9% this year in the U.S. — to reach $5.96 billion — but TV advertising will still outpace digital in actual dollar growth in 2014, according to a new study from eMarketer.

Other research has indicated TV advertising budgets will shift to Internet video. But per eMarketer’s forecasts, TV spending in the U.S. will continue to climb over the next five years, growing 3.3% in 2014 to $68.54 billion.

“Time spent with digital video is growing significantly, and it’s taking away some TV time,” eMarketer analyst David Hallerman said. “But given the diversity of placements and platforms, digital video viewers are more difficult for advertisers to target.”

While digital-video advertising is growing faster, marketers will allocate more additional dollars to TV — $2.19 billion more than 2013, compared with $1.76 billion in new dollars this year for digital video. That’s a trend eMarketer expects to continue through 2018.

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Advertising in content on Internet-connected TVs like as set-top boxes, smart TVs and gaming consoles, accounts for much of the growth in the digital-video segment, according to eMarketer. In fact, digital video dollars on PCs are declining in favor of tablets and smartphones, with connected TVs helping pick up slack in the category.

According to eMarketer’s latest forecast, 113.2 million U.S. consumers, almost 60% of digital video viewers, will use connected TVs in 2014. By 2018, that’s projected to reach 90% of digital video viewers. “As audiences find it easier and easier to watch Internet-sourced content on their television sets, and as more and more content compels them to watch, the connected TV universe will offer marketers a unique blend of digital interactivity and TV’s big-screen power,” Hallerman said.

Much of the time audiences spend with digital video is content streamed through subscription services such as Netflix or Amazon Prime Video — neither of which carry advertising, eMarketer noted.