Digital Ad Revenue Continues to Grow
This shouldn’t be groundbreaking news, but it is. For several decades, television ads have been the No. 1 ad revenue category in the world. We can thank special events like the Super Bowl or even the big finals of all that reality tv we can’t get enough of for that. However, that is about to change.
We entered the digital age several years ago. The exact day is debatable, but the fact that we are no longer in the age of corporations (like the 1980s) is not. The crown is expected to be passed from television ad revenue to digital or online ad revenue in the year 2017.
TV Ad Growth Is Limited
It’s not like we didn’t know this wasn’t happening. Television ad growth is limited. With companies like Netflix, Neon and Lightbox, paid TV, like Sky, are working harder and harder to retain the customers they do have. They’re losing too many customers to these online platforms. This isn’t just happening in New Zealand – this is a global shift. In December last year, it was announced that 70% of North American internet traffic is the result of streaming services, like those mentioned above. It’s like cellular phones – very few people have landline telephones for their homes anymore. Why spend that extra money when you’re going to have a cellphone anyway? People spend more time on Netflix and YouTube and don’t see a need to purchase a paid subscription television package.
Digital Ad Revenue Will Soon Exceed TV Ad Revenue
This year, the digital ad revenue is expected to be higher than last year by 17.2 percent – just barely exceeding $160 billion. It’s expected to exceed television ad revenue by 2017.
This shift has been predicted for a long time. However, it hasn’t been until recently that the prediction has been visible. Ad dollars are clearly shrinking in the television sector and growing in the digital ad sector. It’s even contributing to what Magna Global calls, “digital deflation.” That’s what happens when online ads become cheaper and cheaper with the ability to reach larger audiences for less.
Where Digital Ad Revenue Goes
For the first time ever, mobile ads are also expected to exceed desktop ads by 2018 – both of which are under the digital ad revenue umbrella. It doesn’t stop there – digital ads will continue to grow. Most of the ad dollars are being spent on online video, social media and mobile marketing efforts. The shift is consistent with the growth in online video marketing overtaking methods like content marketing.
Is your digital advertising up to scratch? Contact us to find out how to take advantage of this global shift in viewership.