PwC: For Media Companies, Digital Is Now The Central Driver


While print and broadcasting have recovered after the deep recession that ended (at least officially) in 2010, PwC’s Global entertainment and media outlook: 2011-2015 says that since that time, digital has emerged as the central driver for media companies business operations, consumer connections and revenues. Overall, the U.S. E&M market is expected to grow at 4.6 percent compound annual growth rates reaching $555 billion in 2015 since 2010 — while internet ad growth rates are expected to be double that over the same period.

Total U.S. advertising is expected to increase at a 4.2 percent CAGR from $170 billion in 2010 to $208 billion in 2015. PwC is calling for online ad growth rates to average 12.2 percent from 2010-to-2015.

Although digital currently accounts for just over a quarter of total industry revenues, it is expected to account for 58.7 percent of all growth in spending during the next five years, globally. Digital spending in the U.S. is expected to account for 28.5 percent of all E&M spending in 2015, up from 20.6 percent in 2010.

Breaking it down by marketing region, internet ad spending across Europe/Middle East/Africa will reach $41.7 billion in 2015, also a 12.4 percent compound annual increase from $23.2 billion in 2010. Asia Pacific will average 14.6 percent rates annually from $18.0 billion in 2010 to $35.5 billion in 2015. Latin America will expand from $1.2 billion in 2010 to $2.2 billion in 2015, a 14.1 percent compound annual increase.

Looking at where the money will be spent, paid-search ads will rise to $56 billion in 2015, an 11.9 percent compound annual increase from $32 billion in 2010. Display, classified, and other advertising will advance at a 12.8 percent compound annual rate from $35.7 billion in 2010 to $65.2 billion in 2015.

On the PC-based side, global online advertising will hit $121.2 billion in 2015 from $67.7 billion in 2010, a 12.4 percent compound annual increase. Mobile advertising will rise to $8.7 billion in 2015 from $2.8 billion in 2010, a 24.9 percent compound annual increase.

The big question for media companies that depend on display, from Google (NSDQ: GOOG), AOL (NYSE: AOL) and Yahoo (NSDQ: YHOO) to newspaper and magazine websites, much of the growth is actually going to social media, PwC said. Social networking sites as a whole generated around $1.7 billion in advertising in 2010. The growing popularity of social networks is contributing to a rejuvenation in display advertising. In addition to social networks like Facebook taking a bigger chunk of display dollars, PwC expects display to benefit from publishers’ increasing interest in e-commerce and deals offerings. As those two are joined, publishers should be able to balance out the effects from competition from the likes of Facebook and Twitter. Release


Rex Hammock

As the research is behind a pay wall (or maybe I’m clicking to the wrong place), this is a response to your article only. I don’t disagree that “digital is a driver” but the statistics used to make that argument seem cherry picked. Media companies are far more than “advertising revenue.” And when it comes to “digital revenues,” those can be from sources other than advertising. Is there a way you can clarify how the research breaks out “advertising revenues” that are shifting from other media to advertising revenue specifically related to advertising revenues generated by digital media. (In other words, a more direct comparison of legacy media advertising vs. digital media advertising, subscription vs. subscription, ancillary revenues vs. ancillary revenues)

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