Digital Ad Spending Continues to Grow at Double-Digit Rates
It’s little secret that investment in digital advertising is growing worldwide; that the audience for digital ads is growing; and, that publishers are slowly turning their backs on print. But, just how fast is digital taking over the reins?
Well, if ad spending is any indication, digital is growing pretty fast, according to new data by eMarketer. In fact, worldwide ad spending is expected to continue growing at double-digit rates until, at least, 2015, reaching the quarter mark in 2016. Last year, digital ad spend worldwide reached over $100 billion, and is on pace to reach over $160 billion in just three years.
Unsurprisingly, North America represented the biggest chunk of the digital ad-spend pie, spending 39 percent of ad revenue on digital. And, while North America and Western Europe are the largest digital ad spenders, growth in both continents is lagging behind — with growth in Africa and the Middle East, Latin America, Asia-Pacific and Eastern Europe outpacing the two leading digital-ad continents.
Per user ad spend shines in North America and Western Europe, with each country estimated to spend $168 and $112, respectively, in 2013.
But, while digital ad spending is on the rise, brand-based budgets are slow to ramp up their digital investments.
“While digital advertising now gets the majority of media spend in the UK when taken as a single channel (30% vs 26% for TV),” Turn’s Pierre Naggar said in a recent AdMonsters article (Roll Out the Red Carpet: Premium’s Entrance Into Programmatic). “When you examine brand budgets, the IAB estimates that just 13.5% of digital advertising is brand-based rather than direct response.”
RTB in Europe – Cautious, Yet Optimistic
Wrapping your head around the state of real-time buying in Europe can be, at times, painstaking. While RTB can be seen as nearly ubiquitous among North American publishers, those across the pond are bit more cautious about diving into the programmatic game. This isn’t that surprising considering that issues from privacy to highly localized markets make integrating automated selling systems across the European landscape a seemingly Herculean task.
But, tides are changing; and, European publishers continue to make an about-face, latching on to RTB and programatic more and more. In conjunction with PubMatic, AdMonsters released its 2013 European Publisher RTB Report on Tuesday. Putting Europe on center stage, the 2013 report evaluates the state and future of real-time buying as the continent’s digital ad markets increasingly globalize, and programmatic becomes increasingly important in the European digital advertising landscape.
The report also features insight from industry opinion leaders, including Future Publishing Limited’s Rob Brett, BSkyB’s Lyndsi Plummer, Salary.com’s Michael Guerin, and others, giving readers a true eye into the many attitudes towards programmatic and real-time buying in Europe from a keen perspective.
Ad-tech company Infectious Media rounded up its facts, figures and insight about the growth of real-time buying in Europe with its ‘Real-Time Buying: Year Review Europe’ infographic (PDF). Among the findings, France, Germany and the UK lead the push for RTB in Europe, with the RTB percentage of total display inventory doubling for each country in 2013. According to Infectious, RTB is expected to increase by 75 percent in 2013 alone, and increasing by more than four-fold in the next four years.
Put Your Money Where Your Mobile
This week’s buzzword is mobile (Who are we kidding? It’s the buzzword of the year, maybe second to ‘native’). And, as companies like Facebook brag about ramped up mobile spending (yes, that’s 1-in-5 ad dollars being pushed towards mobile); but, the question remains: Is all of this investment in mobile paying off?
Ad Age’s John McDermott takes a look at, arguably, the most mobile of digital-media companies – Pandora to answer the question.
More than 80 percent of Pandora’s users log in from mobile devices, making the service “the most heavily indexed major U.S. media property on mobile devices,” according to ComScore. For reference, Twitter users are almost split down the middle between desktop and mobile use.
“Mobile still is a new revenue stream. Last year, on the display side, there were half a billion dollars spent against it domestically, and we accounted for 20 percent of that spend,” John Trimble, Pandora’s chief revenue officer, told Ad Age Thursday.
“Now, mobile is about 55 percent of our overall revenue. We’ve leaned really hard against monetizing mobile because we see it as the future. It’s where our audience is.”
With such an immense mobile user base, Pandora represents a sort-of anomaly among digital media; and, the company’s relationship with advertisers shows the uniqueness of Pandora’s platform. A lack of research, data and standardization may make advertisers wary of push dollars into mobile.
“The budgets allocated to mobile don’t really coincide with the amount of consumption, users and ability to influence,” Trimble said. “If you’re a CMO, you’re going to need more data, more research, standardization.”