Digital advertising poised for growth next year even as traditional revenues crumble

Digital advertising will continue to outstrip other media forms this year and next when it comes to bringing in ad dollars, according to a new forecast from media buying company GroupM.

Internet advertising is projected to the grow by 18 per cent year-over-year in 2016, and by 15 per cent next year, the New York-based firm said.

That puts digital ad growth far ahead of cinema and out-of-home advertising, which are projected to expand by no more than 4.3 per cent next year.

At the other end of the spectrum, big drops are forecast for newspaper and magazine advertising.

GroupN is forecasting a 22 per cent year-over-year drop in newspaper advertising this year, and a 15 per cent drop next year.

Similarly, magazine advertising is projected to tumble by 25 per cent this year, and 20 per cent in 2017.

The falling advertising spending in newspapers and magazines has meant job cuts in traditional print media in Canada. The National Post recently announced plans to cut its salary expenditure by 20 per cent, while the Toronto Star and the Globe and Mail have both trimmed staff. Some papers have ceased publication while others have shifted entirely to digital editions.

Meanwhile, Rogers also recently announced changes in its magazine division, with plans to sell some titles, and trim the publishing schedule of others.

For television, GroupM said the Canadian industry is also contracting with viewership in the key 25-to-54-year-old demographic down by six per cent this year from 2015.

“Without the relative success of Canadians in international sporting events such as the World Cup of Hockey and the Olympics, as well as a strong resurgence of the Toronto Blue Jays and Toronto Raptors … audience numbers would have been far worse,” GroupM said.

Soft TV audiences will also result in a forecast fall of two per cent in ad revenue in 2017.

On the digital front, mobile now represents a quarter of “time spent in media” and is seeing growth to 13 per cent of media spending, GroupM said, while also predicting strong growth in digital ad spending next year.