Global digital advertising spending has been increasing at an incredible rate, and is currently just under $US60 billion behind television ad spending, according to a report from McKinsey. By 2019, the gap between digital and television advertising spending will dwindle to just $US2 billion. The report shows that all spending on media is slowly moving digital, as broadband and mobile broadband become feasible for more people. By 2019, more than half of all spending, both by advertisers and consumers, will be on digital products. This trend is important for two industries: online businesses trying to create new business models; and terrestrial television, which will come under pressure. The Australian commercial networks saw advertising revenue of $1.8 billion in the first six months of this year. Television can command these numbers because they own 88% of all video viewing, according to the Australian Multi-Screen Report. But consumers are moving online – watching videos on YouTube or through streaming networks – which saw a global viewing increase of 102% this year. New technologies are also creating entirely new channels for advertising, such as podcasting. Seeing this trend coming, several Australian television networks have moved online. Nine partnered with Fairfax to launch streaming service Stan, and Seven has a longstanding partnership with Yahoo. But the big difference is while there were only a handful of television networks splitting that $1.8 billion in terrestrial advertising revenue, digital advertising revenue is split by thousands. Site highlights each day to your inbox. Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.
According to a report by McKinsey, global digital advertising spend is currently trailing television ad spend by 2bn, however forecasts show that the gap between the two is expected to fall to just $just under $60bn by 2019. Although, television own 88% of all video viewing, more people are now watching videos on YouTube and streaming networks, contributing to the 102% increase in global viewers this year. The trend towards digital may see more television networks move online, such as happened in Australia when Nine partnered with Fairfax to launch Stan, a streaming service.