Forecast: Digital will keep soaring, even with its flaws
There's been pushback on that narrative of late, as television rebounded
October 17, 2016
There are two narratives that have been emerging about digital advertising.
One is that it’s not working as well as advertisers had hoped. They’re moving money back to television, where they see better return on investment and don’t have to worry about issues like click fraud and viewability.
And there’s been some evidence of that in monthly ad spending reports, which suggest TV has slowed its ad spending slide.
But there’s also an opposing narrative, reflected in the latest advertising forecast from Magna Global. It is this: Digital may have its woes, but its growth is virtually unstoppable. Any move back to TV is just a reactionary hiccup, not a longer-term trend.
In fact, we’re just a few years away from digital accounting for a majority of all advertising.
The forecast predicts that by 2020 digital will hold a 51 percent market share, outdrawing all traditional advertising combined.
That’s impressive, considering just this year it will match TV with a 39 percent market share.
Digital advertising challenges
This isn’t to say advertisers have no concerns over digital; they do, and the ROI, click fraud and viewability issues loom large.
But digital has simply become too ubiquitous, too widely used by the people advertisers want to reach, to risk not advertising. Brands that just a couple years ago were avoiding social networks are now going all in on social video, Magna notes.
And yes, that’s taking into account the whole Facebook reporting mess.
“Among the factors that are fueling the rapid growth of social video is the interest of big brands that were previously spending very little on social networks and are now willing to take advantage of the huge scale and reach provided by social networks,” says the forecast.
“Despite the recent glitch in Facebook viewing metrics, we believe the appeal of video advertising within social networks (not only auto-play commercials in newsfeeds but also, potentially, live event streaming as experienced by Twitter and the NFL) is here to stay.”
By 2020, digital advertising spending will hit $105 billion. Mobile will also be a huge driving factor, Magna notes. It will be up 45 percent this year while desktop falls by 0.6 percent.
Overall, digital advertising will rise 15 percent this year. Traditional will fall 1.5 percent in 2016 and then 2.2 percent next year.
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