US Major Media Ad Spending

SOURCE: http://www.emarketer.com/blog/index.php/numbers-major-media-ad-spending/

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Behind the Numbers: US Major Media Ad Spending

Posted By: Nicole Perrin

eMarketer’s major media ad spending projection is the result of a comprehensive analysis of myriad elements related to the ad spending market. We use both bottom-up and top-down approaches for the estimates and projections.

  • Top-down approach: Marketing and advertising expenditures are often budgeted as a whole and allocated to different media based on needs and interests. We analyze macro-level factors that are closely associated with overall marketing and advertising budget growth, such as GDP, consumer expenditures, unemployment rates, etc. In addition, we take into consideration the historical trends of the advertising market and how each medium contributes to the grand total
  • Bottom-up approach: For each medium, we examine the historical trends of ad spending in the medium, consumption trends, and how the medium is faring in relationship with other media. To get a more solid picture of the ad spending trends, we also keep track of the performance of key players and the overall financial situations of the key advertisers and industries within the medium.
  • Numerous sources: Following eMarketer tradition, we also analyzed hundreds of datapoints from some 30 research firms and other organizations that track ad spending on TV, the internet, newspapers, magazines, radio and directories. Tracking these statistics over a period of several years provides a detailed picture of ad spending across major media. All data is normalized to account for differences in methodology and inclusions. Some firms attempt to measure the size of the market through reports of company earnings, while others rely on rate cards or agency billings. By examining a variety of figures and the available information on how they were compiled, eMarketer makes estimates that take all sides of the market into account.
  • Reliable benchmarks: In looking into all the sources, we are able to identify reliable benchmark sources for our projections of several media. The sources whose data we benchmark our projections against are: Newspaper Association of America (NAA) for newspaper advertising,Interactive Advertising Bureau (IAB)/PricewaterhouseCoopers (PwC) for online advertising, Outdoor Advertising Association of America (OAAA) for outdoor advertising, and Radio Advertising Bureau(RAB) for radio advertising.
  • Segmented estimates: Lastly, for all the core media ad spending, we have segmented the online portion of the ad spending figures from the total ad spending figures. By doing this, we are able to avoid double-counting and come up with the total major media ad spending figures, as the online portions for all the traditional media are counted in the online ad spending category. Most importantly, a separate estimate and projection of advertising revenues that the traditional media companies might generate through online venues could provide some insight into whether they can survive the digital transition or not.
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