Digital will pass papers in ad dollars this year

It's long been clear that digital ad spending would outpace newspapers sooner or later.

It appears it's going to happen sooner.

In a forecast released yesterday, independent media agency Carat predicts that online will account for a slightly bigger share of total global ad spending than newspapers this year, revising an earlier report that predicted the shift would take place next year.

Digital will account for 15.3 percent of all spending this year, up from March's prediction of 14.5 percent. It will rank No. 2 in revenue behind only television.

And newspapers will account for 14.4 percent, down from a March forecast of 15 percent.

Next year that gap will widen even more, with digital accounting for 16.9 percent of all spending and newspapers just 13.5 percent.

"The trend of audiences moving online shows no sign of slowing down, as demand for online content and the proliferation of internet and mobile access increases," says Jerry Buhlmann, chief executive of Aegis Group, in the report.

Indeed, this year digital will grow faster than any other media, up 17.9 percent, more than double the second-fastest-growing media, out of home, at 6.9 percent.

By contrast, newspaper ad spending will decline by 2.8 percent. Earlier this year Carat had forecast that the category would be flat to last year, but downward trends in the U.S. and Western Europe forced the agency to revise that prediction.

Total global advertising will grow at a rate of 5 percent, down from the earlier forecast of 6 percent in March.

The continued explosion in digital advertising mirrors what's been seen in the U.S. this year. Online is the only media category that's produced double-digit growth of late, and its increases have contrasted sharply with an otherwise lukewarm ad market.

Mobile is certainly driving some of the digital hype. Smartphone adoption rates are very high in the U.S. and other developed countries, and advertisers increasingly consider some sort of mobile aspect crucial to any campaign.

Social media spending is also gaining momentum in countries outside the U.S. Twitter this week beefed up the staff in its UK office, which handles the bulk of its European ad sales, by 50 percent in anticipation of greater ad spending abroad.

Also of note in Carat's report was a slightly sunnier ad outlook for next year in the United States.

While several forecasters have recently pulled back on their expectations for U.S. ad spending this year, Carat held steady with its March prediction of 4.9 percent growth.

But it raised its outlook for 2013 spending from 4.2 percent in March to 5.3 percent, bolstered in part by digital spending.
 

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