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Ad Spending to Hit Record $172 Billion Next Year; Digital to Overtake in 2017

The U.S. ad market is expected to hit a record $172 billion in 2015 with more money than ever being spent on digital

The U.S. ad market is expected to hit $172 billion in 2015, an all-time high driven in part by a robust uptick in digital ad spending. The spending will beat out the previous record at $169 billion set in 2007.

According to a report out from Magna Global on Tuesday, the level of spending growth is the highest the U.S. ad market has seen in 10 years. And one in three of those ad dollars in 2015 will be spent on digital ads.

Also read: Entertainment and Media CFOs Say Digital Future Looks Bright

“Digital keeps growing faster than we anticipated,” Vincent Letang, executive vice president and director of Global Forecasting at Magna told TheWrap. “But the U.S. is not at the forefront. In the U.K., digital has been bigger than TV for four years.”

In 2014, Magna expects digital media advertising revenues to hit $50 million, up 17.4 percent. Total U.S. media owners ad revenues in all core media will reach $167 billion this year, growth of 5.1 percent.

The research firm declared digital ad revenue will hit $72 billion by 2017, pulling slightly ahead of television at $70.5 billion. The shift in spending is taking place one year earlier than Magna had anticipated. The firm had previously reported that it expected digital exceed TV in 2018.

Also read: Internet Ad Revenues Hit All-Time High in 2014’s First Quarter

Digital media sales will be driven primarily by video formats and social media. Mobile-centric advertising will remain strong as mobile formats within search, video, social and display. Those sectors will grow by 51 percent to reach $17.5 billion, making up 30 percent of total digital spending. Non-mobile digital advertising is only expected to grow by 5 percent.

Letang noted that brands in the food, personal care and automotive categories are becoming more open to advertising online.

“Day-to-day digital media buying is becoming more attractive to more conservative buyers who traditionally gravitated toward TV,” said Letang. “More mainstream advertisers are diversifying.”

Also read: How Comcast Wants to Change TV Advertising

Television ad spending has been particularly sluggish in 2014, but, per the report, it doesn’t appear to be a trend. The firm attributes the slow down to the fact that TV was among the media categories most affected by the second-quarter slowdown.

“We believe the dip in TV sales was partly circumstantial and partly structural [with] acceleration in the long-term shift of ad dollars towards cable TV, Spanish networks and online video,” Magna stated in the report.