Internet Ad Spend Is About to Surpass TV. Whoa.

Published on September 13, 2017

KPCB’s Internet Trends report is always a highlight of the year for digital marketing pros, and 2017’s report – released earlier this summer – was no different; as always, the report was easy to digest, fun to read through, and chock full of interesting insights for digital media fanatics like us.

But, while the Internet Trends report is always full of news and big implications for the field of digital marketing, we didn’t expect to learn anything that would make us go full Keanu Reeves:

So, just what made us go “whoa?” Oh, just the fact that analyst Mary Meeker believes that internet ad spend is going to top $200 billion for the first time this year – and, in the process, surpass TV ad spend for the first time in history.

While that may not make you perform a spit take, it really is hard to state what a big deal that prediction is. And we’re not talking about the $200 billion, necessarily – after all, internet ad spend has increased year over year by leaps and bounds since at least the early 2000s.

What is a big deal is the idea that internet ads are about to become more financially – and, by extension, culturally – important than television spots and commercials.

We mean… We’re talking about TV, here! The boob tube! The idiot box! TV has been one of the dominant forms of technology in the U.S. and around the world since the 1950s; it has united us all for events and large and small for generations now, and its long-term cultural relevance, even a decade ago, seemed all but assured.

But now? According to the Internet Trends report, the Golden Age of TV may finally, officially be drawing to a close. And it its place?

Social Media Ads

2016 and 2017 were supposed to be a turning point for social media marketing, during which more brands than ever would adopt a social media advertising campaign for the first time; per Internet Trends, that’s exactly what is happening. By all accounts, social ad spend leaped during 2016 and seems poised to continue its ascent through the rest of this year.  

According to the report, Facebook continues its longtime dominance in the social advertising field; advertising revenue for the platform grew by 62% between 2015 and 2016, higher than the year-to-year growth for both Google (20%) and all other online advertising channels (9%).

And there’s reason to believe that advertising on Facebook and other social media platforms can actually drive in real purchases! According to the report, 26% of people who click on a targeted ad on Facebook make a purchase; even among those who don’t engage with an ad, 7% report that they still end up buying the product – meaning that the platform is still effective at delivering brand messaging to the consumers most likely to be affected by it.

Indeed, this is reflected by a culture-wide shift in the way we view social media as an ecommerce destination. Take Pinterest, for instance: According to the Internet Trends report, 44% of those surveyed in 2017 view the social media site as a “great place to browse for things you might want to buy,” as opposed to just 33% of those surveyed back in 2015. Similarly, nearly a quarter view Pinterest as a viable place to actually buy things online today, whereas just 12% saw it as a shopping destination just two years ago.

Mobile Ads

Perhaps we should have seen the writing on the wall when it comes to the decline of TV.

After all, as we’ve noted before, we live in a multi-screen world; smartphones have become our default devices for reading or watching media, making up the vast bulk of all time spent consuming screen media – phones account for 147 minutes of screen time every day, while televisions and computers account for just 113 minutes/day and 108 minutes/day, respectively.

Even more importantly, most of us now use our smartphones or other mobile devices even while we’re consuming other forms of media! According to a recent study, 72% of smartphone users engage with their phone while watching TV, either to supplement their viewing experience (in a process known as “meshing”), or to perform completely unrelated tasks (a practice referred to as “stacking”).

With this in mind, mobile devices, unsurprisingly, are becoming hotbeds for ad spending: According to the Internet Trends report, mobile ad spend reached $37 billion in 2016 – meaning that it accounted for nearly half of all internet ad spend ($73 billion).

One last thing to consider? The richness of the mobile device experience opens it up to a variety of advertising channels, meaning that marketers can experiment more than ever before with in-app ads, location-tagged ads, and other marketing options that didn’t exist even five years ago.

Want to keep up with the ever-changing world of digital marketing? Looking to wrap your head around your options when it comes to social media and mobile marketing? We’d love to keep the conversation going! Drop us a line today to get started, and be sure to follow our team on Twitter or Facebook, where we keep the geek speak going 24/7.