Online ad spending by the US media and entertainment industries will rise from $2.77 billion in 2012 to $4.34 billion by 2016, according to a new eMarketer report, “The US Media & Entertainment Industries: Digital Ad Spending Forecasts and Key Trends.” “As more consumers turn to the internet for news and entertainment, advertisers are using digital campaigns to raise awareness, generate buzz and encourage online sales.”
eMarketer’s ad spending forecast combines media and entertainment because “the line between media companies and entertainment companies is becoming increasingly blurry.” The same corporate conglomerates often own the media that produce entertainment content. Additionally, these organizations are able to use their own delivery channels to advertise and cross-promote their products.
However, there are some important differences between media and entertainment when it comes to digital ad spending trends. While aggregate spending will increase over the forecast period, spending in the entertainment sector will actually decline this year, and flat spending by hard-pressed traditional media outlets will contribute to lower-than-average growth for entertainment and only average growth for media through 2016.
“Though media companies control some of the most visible online properties, their spending on both traditional and digital advertising appears to be artificially depressed,” said eMarketer. The industry still benefits from its unique ability to place free or lower-cost “house ads.” However, eMarketer sees indications that this approach may be falling short in reaching today’s multitasking consumers. Some, including Google and Gannett, have stepped up multipronged approaches that go beyond their own backyards.
In the entertainment-only industry, changing marketing dynamics in a number of major sectors will contribute to a slowdown in spending. Movie studios, the music industry and even video game companies face challenges from lower sales and online competition. The industry will contract this year as it looks to new revenue models focused on targeted, nice products.
“Despite these challenges, entertainment industry ad spending and growth is expected to pick up in 2013,” said eMarketer, “fueled by a better economy, streamlined content distribution models, a better understanding of digital marketing and new technology to promote.”
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