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Study: Ad Revenue To Rise In 2015

An increase in spending on digital advertising will drive overall ad revenue growth in the U.S. in 2015, a new study says.

An increase in spending on digital advertising will drive overall ad revenue growth in the U.S. in 2015, a new study says. Magna Global, a strategic media company, predicts domestic revenue to rise 2.7% to $169.5 billion. Digital media expenditures will soar 15.5%, the forecast shows.

The continued migration of ad dollars to digital means other traditional mediums will lose market share. TV revenue, for example, will decrease 1.4% in the U.S. in 2015 and ultimately be overtaken by digital in 2017, Magna predicts. The growing dominance of digital is causing other changes, too. "The shift to digital is having a deflationary impact on the entire market as digital formats, whenever comparable to traditional formats, look cheaper and therefore erode the pricing power of traditional media categories," Magna wrote.

Globally, ad revenue will grow 4.8% in 2015 to $536 billion. That predicted increase is in line with another forecast from ZenithOptimedia, which predicts a global ad spend rise of 4.9% in 2015 to $545 billion. Similar to the U.S., digital media is expected to see huge gains on the global front, reaching 30% of market share worldwide next year, Magna says. Digital media is already the number one category in the U.K. and other foreign markets.

In the digital sphere, paid search is the top revenue-generator, accounting for nearly half of all global dollars, according to Manga Global. Next comes display (21%), social (12%) and video (8%). Still, the hottest digital sub-category appears to be mobile, with ad spending on the medium expected to skyrocket, representing a third of total digital ad dollars by 2016.

In 2014, global ad revenue from digital accelerated by 17%. At the same time, spending on newspapers and magazines declined by 4.3% and 7.3%, respectively. Radio was flat over the same time period. In the U.S., overall advertising spending increased 4%. TV ad revenue grew 4.8% in 2014, but that was below Magna Global's spring forecast of 8.6%.