Ad Spend Trends. How Can Smaller Advertisers Take Advantage?

Calculating the amount spent on advertising marketing last year is a challenge; most surveys don’t line up. Given this, I don’t spend much time dwelling on the predictions of future ad spend. However, I do look for overall trends that different studies agree upon, and see how smaller advertisers can join in.

The Overall Direction of Ad Spending

Across the board, Zenith, MAGNA, and Dentsu Aegis Network have the U.S. Market softening while Eastern Europe and Asia will lead the ad spend increases (as a percentage). The U.S. growth range goes from 1.6% (MAGNA) up to 3.6% (Dentsu Aegis). This follows a pretty strong market in 2016 (election year). Growth for Eastern Europe and Central Asia range from 6.6% to 9.8% and Latin America coming in around 7%.

Globally, ad growth is expected to range from 3.8% to 4.2%, reflecting the proportionally large influence of the U.S. ad market of about $335B.

Mobile & Digital Ad Spending; The Trend Continues

Dentsu Aegis expects digital advertising to overtake television by the end of 2018, and sees mobile advertising accounting for 56% of digital ad spend globally by the end of 2017. Zenith is expecting digital ad spend to outpace television by the end of this year. Either way, the trend of digital growth over the past decade has finally brought us to the point where it becomes the default channel for advertisers.

As part of this digital expansion, three key segments are expected to see the major growth:
Video up 32%
Social up 29%
Programmatic up 25%

No longer is television the presumptive channel for advertisers.

How Can Small & Mid Sized Advertisers Be Part Of The Trends?

For years agencies and media have been pushing brands to recognize the power of digital for brand building purposes. While larger companies with larger budgets have been able to leverage the brand building capabilities of digital, most smaller to mid-sized advertisers continue to see digital marketing for direct marketing purposes only; lead generation or e-commerce are the two areas they focus on.

With efficiency improvements in video, social, and programmatic, upper funnel objectives (awareness & consideration) are within reach of most marketers. When leveraging technology and targeting capabilities, advertisers can be part of the expanded digital landscape while working within smaller budgets.

Video Production Levels

The combination of video and social creates a unique opportunity for advertisers. Between lower cost video production services and do-it-yourself tools, marketers can create videos that are valuable and even entertaining for the target customers. Online, consumers are not expecting exceptionally high production value; content value is far more important. This isn’t a license to produce junk, but it does mean advertisers won’t have to make the exponentially expensive jump in production quality that was expected a decade ago.

Efficiency With Ad Targeting

Targeting technology plays to the benefit of small and mid-sized advertisers. There was a time when you had to pay for exposure to people that will never be in the market for your products or services. While you can never completely eliminate wasted exposures, the technology today allows for fairly precise targeting. Depending on the media channel and partner, you can minimally target geography, demographics, and interest. With programmatic platforms, the technology will ‘learn who is responsive’ to your message, reducing wasted impressions as it gathers more data

The most challenging part for most advertisers is patience. The idea of tying digital spend directly to revenue has been the cornerstone for online advertising for a long time. Over the past ten years, digital has become a key part of life for nearly everyone in the U.S. Becoming a consistent part of the experience lays the groundwork for your brand to be top of mind when the consumer is ready to enter the market. As a brand marketing channel, the benefits cannot always be tied, dollar for dollar, to the ad spend. However, by applying the latest technology, you can see your investment impact behavior in the short term and sales in the long term.

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