As digital advertising grows, so do questions
It will surpass TV next year to become the No. 1 medium
March 11, 2016
There is little question that digital advertising is the future of media.
Just this week another forecaster, eMarketer, predicted that digital ad spending will pass TV to become the No. 1 medium next year, joining similar forecasts from Magna Global and ZenithOptimedia.
It’s a natural evolution.
People spend more time on digital now than most traditional media, and online ads are cheap, much cheaper than TV.
But as advertisers clamor for video, social media, mobile and other forms of digital ads, there’s a big question looming.
Does online advertising actually work? Or better, does it work so well that it deserves to siphon off great chunks of ad dollars from traditional media in all its forms?
One has to wonder.
Digital, for all its advantages, has a number of problems. Right up there is click fraud. How effective can an ad campaign really be if a quarter or a third or more of the ads the client is paying for are never seen by the target consumer?
Another problem is ad blocking, which raises the same question as above.
The big appeal of digital among advertisers has always been the ability to track results. But what good is that if the numbers are entirely skewed–made worthless–by click fraud and ad blocking?
But another huge issue–one that doesn’t get nearly the attention it deserves–is the dreadful quality of most online ad creative.
It’s all about driving clicks. It’s not about branding. In reality there is very little good branding online.
And the fact is, real advertising–advertising at its best and most effective–is and always has been about brand building.
Indeed, the rush online also seems to have erased advertisers’ memories. They’re abandoning media that for decades delivered results, notably magazines and newspapers.
The issue is not whether digital will continue to grow, or at what pace, but whether and when it will begin living up to advertisers’ inflated expectations.
In the meantime, the challenge for media buyers will be to make the best arguments for a balance of media that takes advantage of the best of each. That’s always been their role. Going forward, it will become a more critical one.
The eMarketer report makes a compelling case for the rise of digital. Spending will rise to $77.37 billion next year, totaling 38.4 percent of all ad dollars.
That’s well ahead of TV, which will be second at $72.01 billion, or 35.8 percent of all spending.
TV’s share is down from 39.1 percent in 2014, despite the fact that its ad dollars will be up by $4 billion. That’s because digital is growing even faster.
Digital dollars are up from $49.69 billion in 2014, a jump of 55 percent in just three years.
Mobile will, for the third straight year, account for the bulk of digital dollars in 2017, with $52.7 billion. That’s more than newspapers, magazines, radio and out of home combined.
A number of other forecasters have made similar predictions for TV and digital over the past year. Most see 2017 as the year digital pulls ahead. Internet ads jumped ahead of broadcast already, and broadcast accounts for the bulk of TV spending.
It’s easy to see what appeals to advertisers about digital. It’s much cheaper than TV, with a CPM of anywhere from $7 to $33 versus $1.90 to $10 for the web, according to investment banking company Peter J. Solomon.
And time devoted to the medium has soared. From 2010 to 2014, time people spend with digital media almost doubled, while traditional media time fell by more than 25 minutes, according to ZenithOptimedia.
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