growth in digital ad spending is down to 7.8% for this year.

According to a new forecast by eMarketer, the digital ad spending in the United States is expected to only increase 7.8% from 2017 to 2023. This will be the first time since 14 years that it has fallen below 10%.

The forecast predicted that it would rebound to 11.2% in 2024. The forecast predicts that digital advertising spending will increase at a 10% rate per year through 2027.

In 2021, digital ad spending saw a dramatic recovery following the initial COVID pandemic wave — with a growth of 37.6%. In 2022 the numbers dropped to earth, with a 10.6% increase.

The digital slice of the pie. Total media spending is expected to rise only 3.8% in this year, as traditional media investments continue their migration to digital.

In 2023, digital media will account for 74.6% (or $264 billion) of the total media budget in the United States. Digital media’s share of total media spend is expected to increase by about 2% per year in the next few years.

Display advertising and connected TV (CTV). CTV advertising continues to grow.

For some context, more than half (55%) digital advertising is spent on display ads. Display ads are expected to grow by 7.9% in revenue this year. CTV’s projected 2023 growth is 21,2%, nearly three times that of digital.

According to eMarketer, CTV ad spending is expected to reach $25 billion in this year. This represents 9.5% of the total digital ad revenues.

In 2023, social display is expected to grow by only 3,4%. About a quarter (25%) of digital advertising budgets are spent on social network display.

Dig deep: Why CTV and OTT are important

Search, retail media and paid search. Paid searches represent 41.8% of digital expenditures and should reach $110 Billion this year. If this happens, then its growth rate will be slightly higher than the digital market as a whole, at 8.2%.

Retail media networks (RMNs), which are part of the search industry, have seen a growth of 18.7% in retail media searches. The projected spending for this segment will be close to $30 billion by 2023.

RMN’s digital ad revenues (not only in search) are on track to increase from $31 billion to $45 billion by this year. If the current spending rate is maintained, it will surpass $106 billion by 2027.

Dig deep: Home Depot and Kroger Use RMNs To Improve Shopper Ad Experience

Why do we care? These numbers show that digital advertisers have slowed down after a notable rebound in 2021. It is possible that a more modest recovery will also be in store for 2024.

CTV and RMNs are two outliers in this narrative. They show that, regardless of the overall trend, it is important to reach customers where they live. Brands must adjust their budgets when TV viewers cut the cord to stream services. They also take advantage of RMNs, which provide brands with new ways to reach out to their customers while they shop.

The post Digital Ad Spending Growth Drops to 7.8% This Year first appeared on MarTech.