Digital Video Ads Threaten Broadcast TV Spots, Says FTI

Digital Video Ads Threaten Broadcast TV Spots, Says FTI

Online advertising will surpass broadcast television spots this year, according to FTI Consulting’s annual US media industry forecast.

FTI projects online ad growth will spurt 11.5 percent to $41.8B for the full year to top the projected $38.9B in broadcast ad spending.

Digital has grown at a 10.3 percent annual clip during the past five years to more than double the 4.2 percent yearly hike in TV ad outlays.

The consulting outfit says online ads ad growth came at the expense of the overall market during the six years. It believes that every 1.0 percent growth in digital market share increase results in a 1.8 percent contraction of the traditional ad market.

Luke Schaeffer, co-leader of FTI’s media & entertainment team, said if digital follows a growth curve similar to other technologies it will rise from 22 percent of the market today to 30 percent by 2020.

FTI is monitoring whether the rise of video ads is accelerating digital ad growth.

“If that does indeed prove out, we estimate the digital video ad trend could eliminate much of the forecasted growth in TV advertising over the next five years,” said Schaeffer.

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