Without a doubt there have been some major recent shifts in advertising. This year, the industry has encountered growth in expenditure, an emphasis in the mobile medium and a focus on devoted customers.
Here is a look at 12 charts reflecting the current state of advertising.
Global Look At Advertising
At the start of 2018, WARC, a marketing intelligence service, predicted a global growth of 4.7 percent in advertising expenditure for the year—a total of $572 billion. The company concentrates on the spending of 96 markets. The rise is pushed by major events like the PyeongChang 2018 Winter Olympics, FIFA World Cup and the US mid-term elections.
WARC also attributes the global spending increase to the reduced dollar volatility in emerging marketing. Lower volatility means that a security’s (stock, bonds, money market) value does not fluctuate dramatically, and tends to be steadier.
It was estimated North America would see a five percent growth and Asia-Pacific a six percent increase in spending. On the opposite end, The Middle East and Africa will continue to decline its ad spend at -4.1 percent, however at a slower pace than past years.
Overall, it’s an increase in ad spend compared to 2017 when the global growth only rose three percent.
Zenith Media had a similar 2018 advertising expenditure forecast. They predicted a 4.6 percent growth reaching $579 billion. However compared to the nominal GDP, ad spending will not evolve as quickly.
The United States holds the number one spot for top ten advertising markets spending $197 million in 2017 and an estimated increase to $217 million by 2020. Between 2017 and 2020 it’s predicted it will stay quite stable.
The major switch will be Australia bumping France down to take eighth place, and Indonesia will oust Canada to take tenth.
Yet, when examining the various regional blocs, Eastern and Central Asia will have the largest forecast growth of 8.8 percent from 2017-2020. It’s a big turn considering it was the area most affected by the financial crisis of 2008-2009.
Mobile Ad Takeover
Unsurprisingly, the medium with the biggest ad spend increase is internet advertising (desktop and mobile). By 2020, global advertising expenditure for mobile ads will increase to 29.3 percent.
Like any business, it’s typically all about revenue. The Nielsen Company estimates that total media revenues for 2017 decreased three percent from 2016, but digital ad revenue grew 21 percent. Mobile ad revenue rose 36 percent earning $49 billion in 2017.
Until this year, television was the leading advertising medium. The rapid growth of paid search is one of the culprits to its decline in popularity.
Print ads don’t have a bright future. The medium is losing its market share and continues to decline at an average rate of five percent and six percent a year.
In two years, its expected magazines will only have around a 3.8 percent market share.
Amazon Will Not Only Be The Ecommerce King
It seems like 2018 will be the year Google and Facebook’s share of the U.S. digital ad market will decline. It’ll be a first for these giants. According to eMarketer, the percentage of digital ad spending on these two companies will slowly dip even though their revenue is still growing.
The companies are just not keeping up with the digital ad environment and Amazon appears to be getting stronger with ad revenues expected to climb 63.5 percent exceeding two million dollars.
The report estimates Google’s share will decline to 37.2 percent from 38.6 percent in 2017, and Facebook’s will dip from 19.9 percent to 19.6 percent.
Ad Blocker Challenge
Many consumers will avoid ads at all costs and more internet users—about 30.1 percent—will block them in 2018, up from 27.5 percent last year. It means advertisers and publishers need to find creative ways to target their audience.
So what steps are they taking?
One method is publishers have set up a way to detect whether a visitor has an ad blocker enabled. Next, they deliver a message to those users to persuade them to either completely turn off their ad blocker or at least whitelist (a list of acceptable sites) that publisher.
You’ve probably seen these messages. They usually try to compromise with consumers to make them understand the ads are how publishers pay bills.
Research suggests most people simply go elsewhere when faced with the barriers. In 2016, PageFair—an anti-ad-blocking provider—reported that 74 percent of US ad blocking users polled leave websites when encountering an ad block wall.
Loyal Customers, Marketing Analytics, Seize Budget Lead
In a survey conducted by Gartner, it was discovered chief marketing officers are “playing it safe” by putting most of their budget (63 percent) on customer retention and growth instead of giving that money to acquiring new ones (27 percent).
It requires more capital to earn a new customer, but a company should still aim towards profitability.
This shift coincides with how the budget has been restructured.
Marketing analytics takes priority—out of 13 marketing capabilities—in marketing expense budgets. In 2017, 9.2 percent was allocated, resulting in a jump from its number four spot the year prior. The chart also reinforces the importance of web, 8.8 percent of the budget, and digital ads, 8.6 percent.
This turn comes as leaders must make the most out of existing programs and refocus on ROI by centering efforts on the right customers.
However, it’s not all about loyal customers and being stagnant when it comes to new ideas and risk-taking.
The survey discovered marketing innovation secured 10 percent of capital from the total marketing expense budget. Additionally, 23 percent of CMOs have a fixed annual innovation budget.
Companies don’t want to fall behind and usually innovation programs are handled by internal organization concerns.