Global ad growth will slow in 2017 to 3.7%, with total advertising revenues reaching $511 billion, according to Interpublic Group's Magna.By comparison, Magna estimates that 2016 ad revenue grew at a stronger 5.7% pace, reaching $493 billion. Magna states the slower rate of growth is attributable to lack of cyclical events such as the Olympics and major political campaigns that added $3.5 billion in incremental ad spend last year.
Advertisers are reallocating their budgets. Digital-based ad sales will grow double-digits to become the top media category in 2017, Magna asserted, surpassing linear TV ad sales for the first time ($70 billion vs. $67 billion for national and local).
2016 was the first year when digital ad sales finally surpassed total linear television.
This shift took place years ago in many other countries analyzed by Magna -- such as 10 years ago in the UK and two years ago in China. The fact it happened in 2016 in the U.S. is a testimony to the strength and resilience of television in America: "linear TV is losing viewers but remains attractive enough to national advertisers that they are -- so far -- willing to tolerate high CPM inflation to try and maintain their investment in the medium," says the report.
Digital-based ad sales are approaching 40% of total sales in 2017 and projected to reach 50% by 2021. Magna found social and search captured the bulk (95%) of digital dollar growth in 2016: $10.5 billion out of $11 billion total net growth.