Standard Media Index results for Q4 2016 and the full calendar year show that while the total ad market continues to grow, the rate of growth has slowed slightly (-0.8 percent) despite major events such as the Olympics and election coverage.

From 2012 to 2015, digital ad spend has seen a compound growth rate of +19 percent, with the growth rate from 2014 to 2015 topping out at +26.2 percent.

SMI

By comparison, year-over-year growth for digital in 2016 is only +13.3 percent, a drop of 50 percent.

“Brands today are marketing in a digital world and we have seen the rapid growth in the sector in the past several years.  With that being said, the trajectory of digital spend has recently hit a major speed bump as brands question the efficacy of the medium,” said James Fennessy, CEO of SMI.

Fennessy explained that retail, telecommunications and consumer electronics companies have not seen the results they expected from digital and have moved back to TV, in particular over last year's holiday season.

For example, in 2015 Paramount Pictures decreased their TV spend by 3.8 percent then reversed this strategy in 2016 by increasing spend on TV by 24 percent. Also, Target reduced TV spend by 20 percent in 2015 but increased spend by 12 percent in 2016 and Progressive Insurance went from -5.5 percent on TV spend in 2015 to +6.2 percent in 2016.

Facebook and Google contribute heavily to the growth of digital overall with Facebook showing +83 percent jump in 2016.  Snapchat's messaging app was +356 percent from 2015 to 2016.

Motion picture companies are steadily moving spend (+33.6 percent) toward digital because they believe that's where the consumer starts and ends their movie going experience.

Other top digital growth categories are food, produce and dairy which increased spend +36.5 percent; alcoholic beverages +33 percent; and prescriptions +26.7 percent.

Magazines, newspapers and radio all saw an overall decrease in ad spend in 2016 down 7.2 percent, 19.9 percent and 1.0 percent respectively.

NBC posted a 20 percent gain, benefiting from the Olympics and NFL games.  CBS grew by 3.2 percent, but ABC declined 2.2 percent and FOX was down by 4.6 percent.

Standard Media Index offers real-time, decision-grade data sourced directly from the booking systems of the world’s largest media agencies.