Let’s address a few uncomfortable truths while keeping this blog on task as a digital marketing piece.
Truth #1: Another recession is coming. It’s not political, it’s not personal – the Fed has been tightening rates and ended Quantitative Easing , which means dollars have and will become less available and more expensive to acquire. It’s a natural course to our economy.
Truth #2: Unprepared businesses will fail as a result.
Here is the good news: it appears the Fed is on top of things. While there is no guarantee of security, everything looks to be happening to structure as opposed to the 2008-2010 recession when the train came off the tracks. The second piece of good news – just like a decade ago, well-positioned businesses will have the opportunity to rise to the top of their vertical and dominate their unprepared competition.
How do businesses become well-positioned knowing another recession is pending? The answer lies in your marketing strategy – in particular, your digital marketing plan. In a recession, people want you to talk specifically to them and rest their fears. They are looking for someone to guide them through the storm and assuage their concerns. They want you to speak directly to their issues and address them. Your local broadcast company will tell you that they can do that, but I’m here to tell you, as a former broadcast license holder, they absolutely cannot. Yes, it’s true that a good radio or TV operator will have lots of local news stories and feel good messaging such as “we will get through this” as an attempt to rally the community. As a business though, broadcast cannot target the right people all the time with your messaging. In a tight economy, this type of outreach is wasteful and equates to waste you cannot afford when dollars are tight.
Don’t fall for the radio pitch where you are matched to a station based off your macro overview. If you’re B2B, a financial station may seem like the right fit, but you could also be paying for a graduate student that will never be able to afford or need your service. A TV station selling you the 10 am slot targeting females for your cooking products? You’re paying for the impressions that the kids are consuming while mom or dad is having coffee with their neighbor.
What is the solution? As broadcast has to revamp their business models to survive just like the newspaper industry did a decade ago, you can take advantage of this arbitrage. Most major broadcast entities are now duplicating their content online. Their current sales staff is not capable of selling out the mass of inventory that is the internet. They won’t tell you this, but almost all of these companies are going to multiple open exchanges to fill their unsold inventory.
What does this mean for you as a business owner? You can get placement on all of this programming and target people, not a broad network. How does this work? You need to get a company to collect your data and target your in market audience. Sound complicated? It can be. The good news is Digital-Ignite can help you quickly and efficiently, usually for less than your broadcast buy. If you need a place to start, contact us.
Digital-Ignite will both help you ensure your current audio and video
The next time you talk to a broadcast sales representative you will most likely hear that almost all of America is consuming audio and video content on a weekly basis. They will then allude to it taking place on traditional delivery systems before talking out the other side of their mouth and trying to sell you on their digital platform. Don’t sign that contract until you have taken a look at what following people, not networks can do to make your dollar go much further. And in a tight economy, dollar value is the key consideration in growing and thriving.
If you aren’t currently investing in digital advertising, you may want to reconsider. In 2017, eMarketer estimates that 40.5% ($205.06 billion) of the total media ad spending will have gone to digital.¹ By 2021, they estimate that digital will account for over half of all US ad dollars!
¹:The chart pictured in this article shows the total U.S. ad media share broken down by type of media from 2016 to 2021 per eMarketer as of September 2017. All of the numbers included in this article are from eMarketer’s March 2017 report. The eMarketer reports are made up of forecasts and estimates that they have described as being “based on an analysis of quantitative and qualitative data from research firms, government agencies, media firms and public companies, plus interviews with top executives at publishers, ad buyers, and agencies.”
In the six-year span pictured, it is clear that we have been experiencing a massive shift in how people are consuming media. This has caused ad budgets to steadily shift as well. Did you know that digital ad spending surpassed tv ad spending for the first time in 2016? Advertisers are moving money away from traditional media advertising, and as a result, the percentage of digital’s ad share is increasing.
The reason that digital media spending will continue to rise, experiencing double-digit growth each year for the next four years at least, is largely due to the ever-improving technology available and digital’s susceptibility to measurable data and results.
Breaking Down Digital
In advertising, digital includes many different types of media, such as mobile ads, display ads, search ads, programmatic Spotify/Pandora, etc. Let’s take a look at a few of those and break down how much of digital ad spending they account for.
Advertisers have been contributing more ad dollars to mobile as consumers become increasingly glued to their devices. In fact, since mobile is responsible for over 70% of digital ad spending, it has been the main cause of digital’s growth in 2017. This year, mobile ad spending will be greater than the combined ad spending of directories, out-of-home, radio, magazines, and newspapers. Its spending will have climbed 25% and is expected to reach $58.38 billion (28.5% of all media ad spending); it will likely surpass television’s share of media spending by 2019. By 2021 mobile’s share of digital advertising will hit nearly 80%, and it will account for 39.5% of all ad dollars in the US, largely due to mobile programmatic ads and the number of people who watch videos on their mobile devices.
Display has consistently been the most popular digital ad format in 2016 and 2017. In 2017, display advertising will have made up over 50% of digital ad spending (over $16 billion) for the first time, this includes banner ads, video, rich media, native ads, and social media. Growing at a rate of over 28%, rich media is the fastest growing type of display ad this year (its spending is expected to double by 2021), followed by video at over 23%. Over $30 billion will have been invested in mobile display ads this year, growing at a rate of over 26%. That means that almost three-quarters of display ad dollars will have gone to mobile formats in 2017.
Search will rake in over $36 billion by the end of the year, making it responsible for 44% of digital’s total ad spending. Mobile search ads have played a huge role in search, as desktop search declines slowly over a period of years. Search is forecasted to grow at a rate of over 10% each year through 2021, eventually totaling over $56 billion.
A Look at Traditional Media Formats
While TV ad spending did
Like TV, many advertisers are also shifting their print budgets to digital and mobile formats. The print category in the line chart above is composed of magazines and newspapers. Print has been losing
In eMarketer’s research, “radio” only refers to over-the-air radio and excludes off-air radio and digital radio. This year, over-the-air radio ad spending (excluding digital advertising) is expected to spend 0.2% more than 2016. Its spending will remain fairly consistent throughout 2021, reaching $14.21 billion in 2017. Digital radio is expected to increase faster than traditional radio, but its total spending will be small compared to over-the-air radio at $3.5 billion. If you group both over-the-air and digital radio, its ad spending will be consistent through 2021 because of programmatic advertising.
Out-of-home media is advertising that reaches the consumers while they are outside their homes, such as billboards and movie ads. Out-of-home advertising is not as affected by the adoption of digital advertising and will see an increase of 2% in 2017, largely due to the growing popularity of digital billboards. It will see a small gradual increase over the next few years, increasing around $500 million by 2021.
Directory advertising, which is advertising that appears in a specific type of directory such as an ad in the yellow pages’ directory, has the smallest percentage of media ad spending of all of the different types of media. Its ad
Overall, it is clear that digital is on the rise and isn’t going anywhere anytime soon. Understanding the trends in total media ad spending by media can help us make better-informed marketing decisions, help us allocate our marketing budgets to the channels that will drive the best results, and help us become better marketers overall.