It appears that advertisers are moving away from traditional channels such as TV toward more digital platforms. According to research by MoffettNathanson Research, mobile represented 84% of total digital growth as marketers continue to shift away from desktop.
Google and Facebook were leading in digital as they are responsible for 74% of the market’s overall growth during the first half of 2017.
For 2018, the research company expects a surge in advertising expenditure of 7% during the Olympics as well as US elections.
The company also noted an overall slowdown of overall ad spending during 2017. This is likely to continue during 2018. Indeed, MoffetNathanson adjusted its own ad spend prediction from 3.4% down to 2.5% during the second half of 2017.
However, digital continues to show some strong performance with ad spend predicted to have increased by 20% in 2017.
Traditional media ad expenditure was estimated to be down 8%. Meanwhile, TV ad spend was estimated to be the worst for a three-quarter run in five years. Ad spend on TV was down 2% per quarter.
“As investors turn the page to a new year, there is a natural tendency to expect that there will be a reset of business trends,” the report notes. “Yet given the underlying fundamental advertising challenges in 2017, we continue to believe that these structural headwinds will only accelerate in 2018.”
Part of the reason why ad spend on TV may be declining is a greater consumer focus on streaming services such as Netflix and Amazon. Indeed, a survey by Mortar London of 2,000 UK adults found that they spend an average £303.16 million each month on these services. Over 17 million Brits or 41.1% of the population are subscribing to such services. The survey also noted that Millennials are more inclined to subscribe to multiple services.
The majority of Brits subscribe to Netflix (59.7%), followed by 47.5% subscribing to Amazon Prime.