Forrester says Digital to Overtake TV Ad Spending in Two Years

According to Forrester's latest estimates, U.S. companies' spending on digital advertising will be higher than TV starting 2016 and hit $103 billion in 2019 to represent 36% of all ad spending. The amount spend on TV ads in 2019 will still be rather large at $85.8 billion, which will equal 30% of overall ad spending that year.

Although there will be some cannibalization of TV budgets, Forrester says the bigger contributing factor will be an influx of new money dedicated to digital because marketers are able to prove that digital works.

Marketers aren't upping their digital budgets because of newer technologies such as native ads or programmatic, they're doing so because advertisers have more money to spend now than in recent years and the oversupply of ad inventory online gives them a lot of places to put that money. They are also more comfortable spending their money online after years of testing and learning has shown how effective digital advertising can be. Companies are beginning to cap their search budgets and put additional money in digital's emerging areas like mobile and inventory that can be bought programmatic. Search advertising will remain the biggest benefactor because advertisers are able to more easily measure its benefits. Display advertising, which includes digital video ads, will follow close behind because it appeals to brand advertisers. Spending on social advertising, like Facebook and Twitter, will grow more than any other digital channel over the next five years, but Forrester doesn't see it overtaking search or display in that span because social ad measurement still has room to improve and become more understood.

Forrester says the ability to measure digital ad effectiveness is why the hierarchy of digital ad channels won't change in the next five years, even with an increase in mobile ad spending. Mobile will drive 66% of the growth in digital ad spending over the next five years, but those smaller-screen dollars will be largely going to the same digital channels as desktop dollars.