Media

Rani Molla is a Bloomberg Gadfly columnist using data visualizations to cover corporations and markets. She previously worked for the Wall Street Journal.

Digital ads don't make as much money per viewer as other media, but they'll soon generate more overall revenue. 

Digital is expected to become the biggest global ad segment by 2017, beating out the category's king, television, according to new Magna Global data. Currently, 38 percent of global ad spending is on TV, while about 32 percent is digital. 

Digging Digital
Change in 2015 global advertising by media
Source: Magna Global

Global ad revenue will be about $503 billion this year, according to Magna, and is expected to increase to $544 billion in 2017.

Digital media saw the largest increase in ad sales this year among competing platforms, with a growth rate of 17.2 percent. Newspapers and magazines had decreases (-8.6 percent and -10.1 percent, respectively). Growth on other advertising platforms, including TV, was basically flat. Mobile currently makes up about a third of all digital ad spending; it’s expected to be nearly half of the total digital spend by 2017. Magna Global doesn't break out digital ad revenues on a company-by-company basis, but it says that the usual leaders -- Google and Facebook -- continue to dominate search and social advertising.

ad-spend-global

Social and video ads have fueled digital advertising's rise, though search still remains digital's single biggest source of revenue. Digital video ads are becoming more attractive to advertisers who want to reach younger people because that audience typically favors video-on-demand rather than traditional TV. 

TV ads, of course, still garner a premium, as many advertisers consider them indispensable for reach and impact.

Gains of New Media
Annual growth in digital ads in 2015 by type
Source: Magna Global

Display ads on websites, once the digital world's cash cow, have been supplanted by much more finely-targeted ads. But the landscape changes so quickly in digital advertising that ads that are popular now -- social, video and the mainstay, search -- could be supplanted by new forms, eventually making the current disruptors the disrupted.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Rani Molla in New York at rmolla2@bloomberg.net

To contact the editor responsible for this story:
Timothy L. O'Brien at tobrien46@bloomberg.net