Research: Digital Advertising “Steals” US $2 Billion from Traditional Media Channels

What: Digital ad spending increased by 16% in the U.S., up US$3 billion, with about US$1 billion in “organic” growth from October 2014 through June 2015 (compared to the October 2013-June 2014 period). According to the report by Standard Media Index,  US$1.1 billion of national TV ad dollars, in addition to US$400 million in local TV and syndication spending; US $350 million of print ad dollars and US$150 million of radio spending, flowed to the digital bucket  from October 2014 to June 2015.
Why it matters: The report, which is based on actual advertising expenditure data,  highlights how much digital advertising, particularly online video and social advertising, is growing at the expense of, traditional media. However, it has to be cautioned that the Winter Olympics and the 2014 Soccer World Cup took place in the comparison period. Both events are very TV centric for advertisers, therefore making TV's loss to digital larger than it would have been had these major events not taken place.

Between October 2014 and June 2015, Digital ad spending increased by 16% in the U.S., while it continues to gain market share from traditional media, according to new data from Standard Media Index (SMI) . The report is based on actual advertising expenditure figures SMI gets from media buying agencies and includes Hispanic Media.

Digital ad spending, from October through June, was up US$3 billion, with about US$1 billion in “organic” growth, comparing to that same period a year ago. That organic growth means it wasn’t at the expense of any other media segment’s budget.
According to SMI, which tracks 80% of national U.S. agency spending, the rest of digital’s growth is being powered ad dollars’ flow away from traditional media, mainly TV.

US$1.1 billion of national TV ad dollars, in addition to US$400 million in local TV and syndication spending; US $350 million of print ad dollars and US$150 million of radio spending, flowed to the digital bucket from October 2014 to June 2015.

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Digital Media's Rapid growth

According to the report, around US$1.1 billion of national TV ad dollars,  US$400 million in local TV and syndication spending, us$350 million of print ad dollars and US$150 million of radio spending, flowed to the digital bucket from October 2014 to June 2015, compared with the year-earlier period.

In spite of this, television still accounts for the majority of marketers’ ad spending. According to SMI, from October through June, advertisers spent:

  • US$25.5 billion on national TV
  • us$6.4 billion on local and syndicated TV

While on digital they spent US$22 billion over those nine months.  Digital platforms offer more sophisticated and cost-efficient ways to target audiences. Still, were there better metrics to measure marketers return on investment, advertisers would invest even more  even more in digital ads, some observers claim.

Get ready for #Portada17 on Sept. 14 in New York City! The Hispanic Sports Marketing Forum on September 13, and the 11th Annual Hispanic Advertising and Media Conference on September 14 will provide you with the best content and unparalleled networking opportunities to succeed in Multicultural America.


Celeste Martorana @celesmartorana

Celeste joined Portada’s team in 2013. Since then, she has been working as an editor for Portada’s English-language website and compiling information for Portada’s Databases.

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