Advertising Revenue is Going Digital

As the information age charges ahead at full speed, the utility and ubiquity of the Internet has proven itself all over again. For the first time in history, revenue from digital advertising has surpassed that of traditional TV commercials. Digital ad revenue reached $72.5 billion in 2016 at a 22% increase from the previous year, according to AdAge.com. This is compared to a revenue of $71.3 billion for TV ad sales the same year (as reported by eMarketer).

Just over half of digital ad revenue, or $36.6 billion, could be attributed to mobile advertising. Banner ads racked up the second highest return rate at 38%, with video in third place at 11%. These numbers speak volumes for the case of digital advertising attraction. Additionally, 47% of mobile advertising in 2016 came from mobile search through websites like Google and Facebook. Facebook reported $27.6 billion and Google a staggering $89.6 billion from online ad revenue in 2016 alone.

A study by the World Federation of Advertisers found that two-thirds of respondents of global advertisers with an annual revenue of over $80 billion reported that they’re planning to increase their investment in online advertising in 2017-18, some by up to 40%. Intriguingly, however, many participants in this study also reported low-confidence in the effectiveness of online advertising, with a majority stating they don’t feel that online advertising translates directly into the value of what they’re spending.

This low-confidence could stem from a tendency of people 45+ to sometimes distrust technology and innovation, or to resist technological adaptation. My mom refuses to enact online banking transfers because she “doesn’t trust it.” A lot of people who knew a world before the Internet tend to have like reservations about the reach and the capabilities of the World Wide Web.

Conversely, in 2012 59% of people ages 18 to 29 said that the Internet is “shaping who they are” according to The Atlantic. The Pew Research Center reported that about 73% of people ages 13 to 29 use social networking sites as opposed to 39% of people aged 30 and up in 2010. These trends show how the cultural embed of the Internet is taking hold more so with younger generations than with generations passed. As the baby boomers face retirement and millennials flood into the workforce and consumer base, digital advertising is becoming more and more pivotal to the marketing world.

As society crawls further and further away from a time of hardcopy yellow pages and newspaper wanted ads, digital advertising will become the primary medium of sales, clearly sitting on the cusp as it is. Digital and video advertising have been proven to have higher rates of effectiveness than traditional advertising, especially when advertising teams support branded content. (Read more about this in “The Rising Effectiveness of Branded Content”). Regardless of a perceived low-confidence in the capabilities of online advertising, the numbers don’t lie. Online advertising, especially video content, is taking the advertising world by storm and is soon to be the only avenue of the modern successful business.

To begin your tread of success in digital advertising, contact us now for your next video campaign.