The 6 key drivers of the growth in Digital Advertising. Know what they are?

I watched a Webinar by eMarketer (who collect and analyse online data and have for years) called "Digital Ad Trends-What's Behind the Spending Boom". It revealed some new trends which have some implications I felt for brand owners to consider as they think about their digital approach and strategy. So here is my take out from that webinar, and my thoughts:


One of the key messages they made was that TV is still the dominant, and most powerful, mass media tool for driving awareness and for impact. But digital advertising is now a major tool chosen by brands, and for many brands is - and is growing still in large double digit levels. I think this is important for all to remember, I have commented about this a few times. The key is carefully deciding the role of each within any mix of communication.


eMarketer believe that there are 6 key factors driving the large growth in digital advertising:

1. More Time: Consumers are spending more and more time online, and so brands are looking to be where their consumers are investing their time and attention.
2. More Inventory: A side effect of the amount of time consumers are spending online means that there is more "inventory" and opportunities for site owners to sell more ads.
3. More Measurability: Brand owners are looking to quantify their investment in these tough times, and online makes it easy to provide data and metrics on usage and how consumers act.
4. More Video: The growth of broadband, and technology developments, has also made the use of video based ads possible. These are popular with brand owners looking to build not only awareness but also a brand image and feel.
5. More Mobile: Smart phones have made mobile access of Internet easier and better. Increasingly consumers are using the Internet "on-the-go" and this also enables more location based activity.
6. More Brand Owners: Companies are actively looking to use digital as part of their communication and marketing mix, and so looking to be actively advertising online.
7. More Budget: Due to the above, and helped by the push that it seems every major company CEO is making, we are seeing the release of and move budgets diverted into digital advertising. There is more money looking to be spent, and this is fuelling the growth.

There are some industry trends that are if note an interest that are happening as a consequence of the growth factors:

1. Consolidation. The digital as space is very concentrated, and seems to be getting even more so. Top 10 have over 70% of revenues..Top-5 media companies getting 67% of digital ad spend (Google, Facebook, Microsoft, Yahoo! & AOL). Google dominates, largely due to the strong use of search based advertising. 
2. Search remains the dominant form of digital advertising, and is half of the spend. And is likely to stay at that sort of level. Search is popular as is seen as a great form as (1) appears in context when consumers are actively looking for a topic and (2) is effectively "opt-in" advertising as the consumer has to click on the link to find out more.
3. Display advertising is growing fast. This is driven by brands who not want to build brand image and get brand messages across, and are not always necessarily looking to dried a click through sale (for example a shampoo sold in grocery may be looking to build awareness and image)
4. Video is the fastest growing format, as a result of the drive to build awareness and image by brands

It seems that digital advertising is starting to become part of the communication mix of brands, with TV still being the key for driving awareness fast - and still likely to be the best medium for creating a brand image. However, with the growing ability to buy and use video formats online, digital starts to offer more opportunities. The key is that the consumer is spending more time online, and your brand needs to be where there are. I do believe that for brands able to use TV this is an exciting time. TV can be used to drive awareness and image and drive people online for detailed information and to purchase.


What do you think? Leave a comment on the blog posting!


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