Digital advertising spending is expected to grow faster in media and entertainment than in other U.S. industries. The new report by eMarketer says a key driver behind the projected increases is the heavy use of video and rich media ads, the two fastest-growing ad formats, by marketers of news media, movies, TV shows, games and music. These marketers are also big investors in mobile advertising, which the firms says “makes sense given the migration of media and entertainment consumption toward tablets and smartphones.”
The eMarketer report, The US Media and Entertainment Industries 2014: Digital Ad Spending Forecast and Trends, notes that advertising objectives in media and entertainment campaigns are as complex as the industries themselves. Sometimes marketers are trying to drive specific outcomes — digital subscriptions, in the case of a news publisher, or bodies in seats, in the cases of theatrical film openings or concert tours. Other times media and entertainment firms use advertising to burnish their brands. Examples of these types of ads might include homepage takeovers and sponsorships. Overall, the report says, U.S. media leans toward the direct-response side, with roughly a 60-40 split between direct response and branding. Conversely, the breakdown in entertainment spending is almost the reverse, with 36.5% of the total going to direct-response advertising and 63.5% to branding. This mix between these two advertising objectives puts the combined U.S. media and entertainment industries at an approximately 50-50 split, which is in line with computing products, telecom, and health and pharma.
eMarketer forecasts digital ad spending by the U.S. media and entertainment industry to grow from $4.23 billion last year to $8.54 billion by 2018. Spending is expected to increase by 21.6% this year to $5.15 billion, with percentage gains decreasing in coming years, but still in double digits by 2018.