Mobile Fuels Digital Advertising’s Ongoing Growth and TV Holds Strong

Alyssa Nejaime  | 

Earlier this year, Zenith released its annual ad spend forecast charting the course of online advertising investments. The report from the French media services company projected that advertisers would spend 40.2% of their budgets on online campaigns this year, higher than the 37.6% last year—which marked the first time online outpaced TV as the biggest ad medium.

Zenith’s data mirrors much of what we’ve seen in our own Video Benchmarks reports that analyze the continued growth of digital, most of which has been fueled by the mobile renaissance wrought by the ascendance of smartphones and social media.

Digital’s rise, inevitable as it is in the current environment, has not come without a fair amount of rhetoric that swings all over the pendulum, from overstatements about cannibalizing TV ad buys, to underestimations of its staying power due to the market’s growing pains. Reality, of course, is often found between the extremes. Here’s our read on some of the most recent stats and stories about digital advertising.

Short-term Cuts Belie Long-term Potential
Unilever and P&G made headlines early in the year when they each announced significant cuts to their digital spending budgets, citing issues around reputation and efficacy. Unilever pointed to concerns about advertising getting mixed in with toxic content that giants like Facebook and Google were failing to monitor, and P&G cited ROI concerns as the reason for its $200 million reduction in digital spend.

Some in the industry worried that these cutbacks heralded an oncoming decline in digital spending that would be redirected to more proven channels like TV. And others rejected such seemingly knee-jerk responses and lauded the maturation that is being forced on digital. As Rob Kurfehs, group creative director at Organic, put it in a Media Post piece: “When two of the largest CPG conglomerates in the world are featured in the news for cutting ineffective ad spending, it’s actually good for digital. It pushes ad networks to clean up their act and encourages agencies and buyers to up their rigor and demand transparency.”

Getting Ready for Prime Time
P&G’s Chief Brand Officer Marc Pritchard has for years been an advocate for upping the rigor and transparency of digital advertising. His voice is being heard and is sparking change. As we noted in our most recent Video Benchmarks, ad fraud was down in Q1 2018 by 32% compared to Q1 2017. Pritchard has indicated that fraud is his main concern, overriding issues like viewability which Pritchard sees as less consequential than brand safety.

“This new level of transparency is shining the light on what’s next—marketers taking back control of our own destiny to accelerate mass disruption—transforming our industry from the wasteful mass marketing we’ve been mired in for nearly a century to mass one-to-one brand building fueled by data and digital technology,” said Pritchard in assessing the industry’s progress in priming for the digital wave.

TV Holds Strong
For all the attention being given to digital, it’s worth noting that TV ad budgets are still strong. As we saw with the recent round of live TV events, spending for which solidly outperformed previous years, live TV still brings the audiences and the ad dollars. Digital may be gaining ground, but TV continues to draw a large audience and a large slice of ad spend. The takeaway for advertisers being that it’s about cross-platform plays more than allocating spends exclusively to one or the other.

Recommended Posts