Dive Brief:
- Magna Global released an updated forecast for ad revenue this year with a new predicted increase of 6.3% reflecting $179 billion in revenue according to Ad Age. The group previously predicted a 6.2% increase in June.
- The increase is the largest since 2010, when ad revenue went up 6.6%.
- In a first, digital and TV revenue are expected to be approximately equal this year.
Dive Insight:
Part of the increase in ad revenue for 2016 is based on two major events – the Olympic Games and a presidential election – which drive ad buys.
The larger increase comes as digital advertising is up 18.3%, followed by 4.6% for national TV and 3.8% for out-of-home. Both print (9%) and radio (2%) are declining ad revenue channels.
One interesting development underscored in Magna’s forecast is that digital advertising and TV sales will both generate around $68 million in revenue, the first time digital has matched TV. Magna sees digital continuing to grow a rapid clip, reaching $105 billion by the end of the decade. Within the overall digital channel, social media is driving most of the growth at 44%.
Ad Age reported that taking the Olympics and election ad buys out of the picture, the revenue growth estimate would have been 4.4%, just slightly ahead of last year’s 4.3%. The forecast for 2017 is a 1.4% increase, but with strong underlying demand.
In what might have been seen as a harbinger for the future, the Rio Olympics linear TV views were down over the London Olympics, while digital options saw dramatic increases in views and ad buys. “Instagram, Snapchat, YouTube, Facebook are all sucking the bejesus out of the market. They’re taking increasing shares (of the advertising revenue) and that share has to come from someone,” Steve Allen, a former advertising buyer for Japanese agency Dentsu, told Fortune at the time.