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U.S. Media and Entertainment Digital Ad Spending


How quickly will online media and entertainment spending grow between 2011 and 2016? What percentage of Facebook advertising impressions are generated by entertainment-related companies? What are the most common goals of entertainment-related mobile advertising campaigns? Those were the questions that eMarketer attempted to answer during their latest market study of the U.S. media and entertainment industries.

Overall, the market outlook is very promising, with a few caveats.

Online ad spending by the U.S. media and entertainment industries will rise from $2.77 billion in 2012 to $4.34 billion by 2016, according to a new eMarketer report.

As more consumers turn to the internet for news and entertainment, advertisers are using digital campaigns to raise awareness, generate buzz and encourage online sales.

eMarketer’s ad spending forecast combines media and entertainment because they say that the line between media companies and entertainment companies is becoming increasingly blurry.

The same corporate conglomerates often own the news media that produce entertainment content. Additionally, these organizations are able to use their own online delivery channels to advertise and cross-promote their various product offerings.

However, there are some important differences between media and entertainment -- when it comes to digital ad spending trends. While aggregate spending will increase over the forecast period, spending in the entertainment sector will actually decline this year.

Moreover, flat spending by hard-pressed traditional news media outlets will contribute to lower-than-average growth for entertainment and only average growth for media through 2016.

"Though media companies control some of the most visible online properties, their spending on both traditional and digital advertising appears to be artificially depressed," said eMarketer.

The industry still benefits from its unique ability to place free or lower-cost house ads. However, eMarketer sees indications that this approach may be falling short in reaching consumers that multitask. Some, including Google and Gannett, have now stepped up multipronged approaches that go beyond their own online properties.

In the entertainment-only industry, changing marketing dynamics in a number of major sectors will contribute to a slowdown in spending. According to eMarketer's assessment, movie studios, the music industry and video game companies all face challenges from lower sales and increased online competition.

Therefore, the whole entertainment industry will likely contract this year, as it looks to new revenue models focused on more targeted products.

"Despite these many challenges, entertainment industry advertising spending and growth is expected to pick up in 2013," said eMarketer, "fueled by the hope for a better economy, streamlined content distribution models, a better understanding of digital marketing and new technology to promote."

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