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2016 Predictions and Trends

For the First Time, Advertising To Surpass $500 Billion In 2016

IHS analyst Eleni Marouli predicts 2016 ad spending in this Media Post article by Laurie Sullivan.  “Advertising to Surpass $500 Billion in 2016” includes the prediction that advertising will rise 5.7% and video will become the new mobile. Initiatives around measurement in the advertising industry are also discussed by Sullivan.
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Source: http://www.mediapost.com/publications/article/265493/advertising-to-surpass-500-billion-in-2016.html

IoT Will Become Omnipresent in Our Lives

Chuck Martin’s 2016 IoT predictions for Media Post include an extensive list from a variety of cited sources.  Beacons, wearables, encryption technology, smart machines, and more are presented in, “2016 IoT Predictions: Big Data, Beacons, Wearables, Security.” 
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Source: http://www.mediapost.com/publications/article/265353/2016-iot-predictions-big-data-beacons-wearables.html

Fewer but More Creative Ads in 2016

Matt Sweeney, CEO of Xaxis North America, presents six of the top trends that will impact advertising in the year ahead.  In this article for Campaign Live, “Better Creative, Fewer Ads: 6 Trends That Will Define 2016,” Sweeney predicts that ads will be more relevant and less intrusive.
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Source: http://www.campaignlive.com/article/better-creative-fewer-ads-6-trends-will-define-2016/1377923

Native Advertising: FTC Guidance and IAB Concerns

The Internet Advertising Bureau (IAB) plans to seek additional clarification from the Federal Trade Commission (FTC) concerning the Commission’s recent Guidance on Native Advertising.  Brad Weltman, Vice President, Public Policy at the IAB, discusses his concerns in this IAB press release, “IAB Concerned About FTC Guidance on Native Advertising.”  While both organizations agree on the importance of clear disclosure to consumers, they disagree about other points in the Guidance. 
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Source: http://www.iab.com/news/iab-concerned-about-ftc-guidance-on-native-advertising/

Multichannel Online Behavior Can Predict Online Consumer Purchasing

This December 2015 article from the Journal of Advertising Research examines how consumer behavior across multiple online advertising channels can be used to predict conversions. The authors, Sebastian Klapdor, McKinsey & Company, Munich; Eva Anderl, FELD M, Munich; Jan H. Schumann, Universitat Passau, Germany, and Florian Von Wangenheim, ETH, Zurich, Switzerland, suggest strategies for advertisers to target individual consumers based on this research in this article, “How to Use Multichannel Behavior To Predict Online Conversions-Behavior Patterns Across Online Channels Inform Strategies For Turning Users Into Paying Customers.”
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Source: http://www.thearf.org/journal-of-advertising-research-online-access/

Nearly 8 in 10 Advertisers Now Use Advanced TV and Most Plan to Increase Spend in the Next 12 Months, According to IAB Research

Some form of advanced TV has been used in marketing efforts by 78% of advertisers, according to the survey, “Advanced TV: Ad Buyer Perceptions.”  In addition, 72% of marketers and agency executives surveyed believe that advanced TV will become an important advertising platform within five years. According to a press release by the Interactive Advertising Bureau (IAB), this survey was recently published by the IAB and its Digital Video Center of Excellence.

The current media budget allocation for advanced TV is $1.4 million; however, 70% of advertisers expect to increase their budget for this medium within the next 12 months.  Funding is expected to come from both TV budgets (68% of respondents) and expanded or experimental ad budgets (54% of respondents).  Addressable advertising, second screen ads, and interactive tags are among the advanced TV ad formats expected to increase in the next year.

The strongest benefits of advanced TV include:

-Better targeting capabilities.

-Ability to reach consumers anytime on any device.

-Improved ROI.

-Ability to personalize or localize messages.

 

Potential obstacles to the growth of advanced TV include:

-Marketplace confusion about this medium.

-Uncertainty about the differences between advanced TV and connected TV.

-A lack of understanding about advanced TV’s technical process.

-Concern about high costs.

 

The IAB is establishing a committee on the subject of advanced TV in response to member interest.  The press release includes a link to the complete findings of this report.

 

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Mobile to Overtake Newspapers

According to the latest Advertising Expenditure Forecasts from ZenithOptimedia, in 2016 mobile internet advertising will become the world’s third-largest advertising medium, behind television and desktop internet and ahead of newspapers.

The media agency’s forecasts show that next year mobile will account for 12.4% of global adspend while newspapers will take 11.9%. In terms of actual value, mobile advertising will grow 38% in 2016 to US$71bn, while newspaper advertising will shrink 4% to US$68bn.

Mobile advertising is the driving force behind the growth of the entire advertising market, ZenithOptimedia stated, as it will contribute 83% of all new ad dollars between 2014 and 2017. And as mobile continues its inexorable rise, so print continues to decline across most of the world. ZenithOptimedia predicts that newspaper adspend will shrink by an average of 4.9% a year through to 2017, while magazine advertising will shrink by 3.2% a year. Their combined share of global adspend will fall from 19.6% this year to 16.7% by 2017.

In that year, internet advertising is expected to account for 34% of global adspend, slightly behind television’s 35.9% and is likely to gain the top spot in 2018 on current trends. Total adspend is forecast to grow 4% this year to reach US$554bn before accelerating to 5% in 2016, thanks to the four-yearly boost supplied by the summer Olympics and US presidential election.

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Traditional Out-of-Home Media Continues Growth

Out-of-Home (OOH) advertising revenue rose 3.8% in the second quarter of 2015 compared to the previous year, accounting for $2.25 billion, based on figures released by the Outdoor Advertising Association of America (OAAA).

In contrast to the OOH advertising revenue growth, statistics from Kantar Media reveal that total ad spending in the United States was down almost 7% for the quarter, and OOH and local radio are the only traditional media with significant growth.

In this Research Brief From the Center for Media Research, Jack Loechner provides a ranking of top OOH advertisers, based on their spending, as released by the OAAA.  This ranking includes:

-McDonald’s

-Apple

-Metro PCS

-Warner Bros Pictures

-Geico

The article includes this quote by Stephen Freitas, OAAA Chief Marketing Officer, “…the most significant trend in advertising today is the shift to digital… this hasn’t impacted OOH the way it has other traditional media, because OOH complements… digital marketing… especially mobile… the fastest growing of all digital platforms… ”

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For more on this topic, check out the Media Tab in Morning Coffee.

 

 

 

Connected TV Spend to Rise, While Priority Remains Low

The Association of National Advertisers (ANA), in partnership with BrightLine, an ad platform, reports that more than 70% of 215 client-side senior marketers believe that connected TV represents an opportunity for the advertising industry.  Despite this belief, none of these marketers spend more than 10% of their budget on connected TV.

YuYu Chen, summarizing this report for ClickZ, reports that 48% of respondents whose companies are currently engaged in connected TV or OTT devices plan to allocate more of their TV ad budget to it next year.  In addition, another 13% of respondents not currently engaged in connected TV or OTT, plan to allocate some of their budget to it next year.

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Top benefits of connected TV/OTT include:

  • Audience targeting
  • High engagement
  • Amplification of video content

According to this report, barriers to greater spending on connected TV or OTT by marketers include:

  • Lack of reliable measurement metrics
  • Small-scale audiences
  • Cost/pricing
  • Creative concerns
  • Budgets
  • Not familiar enough (especially reported by respondents not currently engaged with connected TV/OTT)

Rob Aksman, founder and CEO of BrightLine, is optimistic about the future of connected TV.  “There’s nothing stopping connected TV from going mainstream today: there’s scale, there’s targeting and there’s data.  With connected TV, advertisers can not only reach TV viewers, but also offer a better brand experience with clickable and measurable videos.”

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For more on this topic, check out the Media Tab in Morning Coffee.

 

 

Mobile Becoming the First Screen

Jack Loechner, writing for the Research Brief From the Center for Media Research, analyzes The Salesforce Marketing Cloud Report, and finds key changes in global mobile consumer behavior and the digital and advertising landscapes.

Among the findings:

-Mobile is increasingly becoming the first screen in terms of time spent by consumers with media.

-Combined, Facebook, Twitter, and LinkedIn experienced a 49% growth in ad revenue from Q1 2014 to Q1 2015.

-In 2014, digital advertising surpassed both broadcast and cable television revenue in the U.S.  Digital advertising became the largest single channel and the fastest growing channel.  Revenue in 2014 was almost $50 billion.

This report also reveals that the revolution in technology will foster tighter collaboration among marketing, sales, and service departments within corporations. It will also break down marketing silos, which negatively impact brand teams and agency relationships.

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For more on this topic, check out the Media Tab in Morning Coffee.

 

 

Big Spenders on a Budget: What the Top 200 U.S. Advertisers Are Doing to Spend Smarter

The 200 Leading National Advertisers accounted for 51% of U.S. measured-media ad spending and nearly two-thirds of TV advertising in 2014. U.S. Ad spending for these companies rose a slim 2.0% in 2014, but the story is not that marketers are pulling back. They are spending smarter.

Procter & Gamble Co., the nation’s and world’s largest advertiser, is among those making the pitch to Wall Street that digital is more efficient.

“We’re shifting more advertising to digital media, search, social, video and mobile as consumers spend more time there,” P&G Chief Financial Officer Jon Moeller said at a June investor conference. “In general, digital media delivers a higher return on investment than TV or print.”

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Digital Ad Revenue Increases by 16% in 2014

MediaDailyNews reports on an IAB Internet Advertising Revenue Report showing that U.S digital advertising revenue rose 16% to $49.5 billion in 2014 compared with 2013.

This report, which was prepared by PricewaterhouseCoopers, also shows that social media advertising revenue was $7 billion.  This increase reflects a 57% increase in 2014.

David Silverman, a PricewaterhouseCoopers partner who participated in the IAB conference call, believes that brands have developed strategies to monetize their investments in social media. As a result, there has been an increase in the cost per click for ads running on networks, such as Facebook.

Mobile advertising increased by 76% to $12.5 billion.  Search, digital video, and non-mobile display-related advertising also showed revenue increases.

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TV Ad Spending Remains Soft, While Social and Video Jump

Magna Global expects TV ad revenue to decline 2.9% in 2015, including the impact of political and Olympic spending, as reported in the Wall Street Journal . US ad growth in general is hampered by ‘digital deflation’ — the idea that media companies don’t earn as much for their content in digital formats as they do traditionally. Read more »

63% of Marketers to Increase Native Ad Spend

Almost two thirds of respondents expect to increase their native advertising budgets in 2015, according to an ANA survey of member marketers. Currently, native advertising only accounts for a small percent of  budgets– five percent or less for the bulk of respondents (68%). Other findings from this report:

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