This year marks the first year that spending on digital advertising will surpass spending on TV advertising. TV ads or commercials have been the main medium for both major and local companies to reach their target audience. However, less people are watching traditional TV and turning to online streaming services such as Hulu and Netflix while at the same time, more people are browsing the internet on mobile devices such as tablets and smartphones. More people can be reached through these online avenues than on cable TV, therefore, companies and advertisers are spending more money on digital ads.
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It is more important than ever to make sure your company is investing in digital marketing to reach your customers through these online avenues or you could lose out to your competitors. The following statistics and infographic show the increase in digital ad spending and its projected growth.
Total Amount of Ad Spending
Digital advertising edged past TV advertising in terms of spending in 2016 as digital ads account for 36.8% of the total media ad spending to 36.4% for TV ads. In 2017, this difference is projected to increase with digital marketing taking up 40% of all media spending and TV advertising dropping to 35.1%. Mobile marketing spending is growing as well as it accounts for 23.5% of all ad spending and is projected to increase to 27.7% in 2017. Mobile use is one of the biggest factors in the increase in digital ad spending because more people are shopping and browsing on their mobile devices. Your company’s digital marketing strategy must include mobile marketing to help reach this growing demographic of consumers.
Digital Ad Formats
There are several digital advertising formats including email, mobile, and lead generation but display ads and search ads currently account for over 90% of digital ad spending. Display ads, ads that are seen on the right or left sidebar on a website, account for slightly more spending than search ads at 47.0%. The distribution of spending between the digital ad formats is expected to even out by 2018. Spending on email marketing, lead generation, and mobile messaging is projected to have a significant increase over the next couple of years and over 34% of digital ads will be videos. Investing in video advertisements is a great way for your company to take advantage of this trend and strengthen your brand recognition.
Mobile Ad Formats
Mobile advertising spending is expected to increase significantly as the percentage of users browsing and shopping on mobile devices continues to grow. The amount of money spent on different mobile ad formats is also expected to change. This year, display ads account for the most spending at 51.4% with search ads coming in second at 44.1%. Spending on mobile messaging is currently at 3.9%, but this is expected to increase to 7.9% by 2018. Spending on video ads is also projected to increase to 10% of the total spending on mobile ads in 2017.
Who Receives the Most Digital Ad Spending?
The overwhelming majority of digital ad spending is going to Google and Facebook. Google is still the main way companies connect with their customers online, making it important to not only invest in advertising on Google, but also to make sure your website is fully optimized to rank well in Google’s search results. Facebook by far receives the biggest share of social media ad spending with over 77% of the total spending.
What Does the Increase in Digital Ad Spending Mean for your Business?
This shift in spending on digital advertising shows that many companies and advertisers are reacting to the changes in consumer behavior. More people are moving away from TV and watching shows and movies through online streaming services, where they will be exposed to video and display ads. The growing percentage of consumers using mobile phones correlates with the increase of mobile ad spending. Your company must connect with your customers through their mobile devices to help grow and retain your customer base.
If you are interested in expanding your online marketing outreach with digital advertising, talk to our experts at Proceed Innovative. We can manage a PPC campaign to get your paid advertisements on Google and we also offer mobile marketing services using MobiKite to reach consumers on mobile devices. We will help you create a digital marketing strategy that works within your budget and helps you achieve your unique marketing goals. You can reach us at (800) 933-2402 to learn more.
