The U.S. advertising marketplace is forecast to expand by 8% in 2019, according to the latest report from Standard Media Index. Major marketers are anticipated to increase their spend by only 2.5%, while small and medium-sized businesses will demonstrate the lion’s share of growth, at nearly 14%.
Meanwhile, marketers’ love affair with all things digital continues to erode, while social media advertising has also hit a roadblock. SMI notes “sharp hesitation (maybe a hiccup) in digital spending,” saying that major marketers have limited incremental investments in Search “to a tiny” +1.6% growth level in the first four months of this year, via the firm’s Cross-Platform measurement. This is down from double-digit growth in the same period in 2018.
Social, too, has seen incremental investment reduced. While the platform saw a still-strong +24% growth level through the first four months of the year, the figure is markedly down from +50% in the same period last year. In 2018, social grew by over $150 million in the January to April period (vs. 2017). In 2019 that figure was “only” $25 million, per SMI’s Cross-Platform Pool measurement service, as explained by Media Post.
“Exponential growth can’t last forever as the industry matures, but these growth level declines are much more than an issue of percentages off expanding bases,” said James Fennessy, Standard Media Index CEO.
While it may have slowed, digital ad formats across all digital platforms are still demonstrating long-term growth. On a two-year CAGR basis, audio is up 7%, search is up 10%, display (driven by social) is up 11%, and video tops the list with growth at 15%.
Video remains the dominant content and ad format in the U.S. among major marketers, with 63% of their ad spending invested with video publishers and digital video ads on non-video platforms, Fennessy said. “Marketers heavily rely on video in the U.S. to build brand awareness and capture user attention. It’s the closest thing to linear television so we can expect to continue to see advertisers increasing their usage of it.”
Apart from digital audio, SMI does not break out radio in its forecast.