Digital Ad Spending Trending Skyward


Digital Ad Spending Trending Skyward

It”s not news that digital ad spending (pay-per-click, banners, online video, social media, mobile media and apps) is trending skyward and traditional ad spending (TV, radio, outdoor, print) is trending down. What is news is the pace at which this trend is moving. Digital ad spending in the US will continue to increase with budgets totaling $42.5 billion in 2013 and increasing to $60.4 billion in 2017. Around 3 in 10 marketers say they have shifted at least half of their marketing spending from traditional to digital advertising over the past 3 years, according to June 2012 survey results from RSW/US. The RSW/US data also shows that 2 in 3 have moved around 30% of their budgets from traditional to digital, while just 4% have stayed the same in their spending mix.

According to a February 2013 Duke University Fuqua School of Business survey of US marketers commissioned by the American Marketing Association (AMA), the rise of digital ad spending will continue without unabated for a long time continuing to grab a larger portion of marketing dollars.

Why is this dramatic change occurring? One reason is that digital ad spending includes social media which can be the defining force of a business marketing plan in today’s media environment. Social media provides broad opportunities for exposure and consumer impact.  Marketers see social media as vital to any and every marketing plan. Its benefits are easily gauged in the form of exposure and presence. Agencies are in agreement, with 28% saying social is a lot easier to measure than traditional. In fact, when asked which features of digital marketing encouraged their shift, the most frequent reason cited by participants of the survey was increased measurability and accountability (20%).

Digital ad spending is also necessitated by the related shift in viewer focus. As young people spend more and more time on their smart phones, tablets, and laptops and less and less time viewing traditional television and print; the media has to follow its consumers. According to the most recent cross-platform report [download page] from Nielsen, TV consumption is reducing by a larger amount every quarter, but it’s still not a gigantic shift. The 18-24 group, for instance, watched a weekly average of about 23 and a quarter hours of traditional TV in Q4 2012, about 2 hours and 20 minutes less than they did in Q4 2011. That’s about 20 minutes less per day. Even so, the dynamics of how the general populous seeks entertainment, affect the dynamics of how a marketer would approach the marketing plan.

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