Marketing, PR & Advertising and Technology

Digital surpasses TV in advertising spending

Radio, TV and print advertising see decline of 3 percent, heaviest slump recorded.

December 22, 2017
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Digital advertising spending surpassed television ad spending this year.

According to Magna, a global research outlet for media firm IPG Mediabrands, digital ad sales grew to $209 billion, up from $178 billion last year.

Television, which enjoyed relative success last year due to the Olympics, U.S. presidential election and other events, brought in $186 billion in 2016. This year, television ad sales only brought in $178 billion. Traditional (radio, television and print) advertising sales declined 3 percent to $300 billion this year, which was the heaviest decline recorded.

Print and radio advertisement sales decreased by 11 percent and 1 percent, respectively, this year.

A “more dynamic ad market” in China, Brazil and Russia contributed to Magna’s decision to update its global ad forecast from June, but the U.S. remained mostly unchanged, said Vincent Letang, executive vice president and director of global forecasting at Magna.

In total, Magna predicts the U.S. ad revenue will grow by 3.9 percent for the year.

Ryan Lockwood, the creative director of Fairly Painless Advertising agency in Holland and Grand Rapids, said television advertising is declining because the number of television subscribers has decreased.

“People are not watching less TV, they are just watching it in different places,” Lockwood said. “We do a lot of ads on Hulu and other digital TV services, basically, which are pretty interesting, actually. We can get more targeted and get more information back that we can use to make our campaign more successful.”

Lockwood does both traditional and digital advertisement, which he said hasn’t affected him but challenges the company to be more agile and be able to create short and specific content that can go out on social media and video channels, like YouTube’s six-second ad time slots.

He also said it is less expensive to put out digital ads to the public.

Instead of investing money in traditional advertising, Tim Haines, owner of Holland-based digital marketing firm Symposia Labs, said his company is exclusively a digital advertising and marketing agency.

Haines said the ads the company creates are placed on social media and other channels.

“On the page side, it would primarily be Facebook advertising, Instagram advertising, Google AdWords,” Haines said. “So we cover all the channels like email, marketing, changes to website funnels and working directly with the customers’ retention systems.”

The company reported over a quarter of a million dollars was spent on digital advertising on behalf of its clients this year. Haines said that was five times the amount that was spent in 2016.

The increase in digital advertisements is more useful because of the tracking that is involved, according to Conner Hammersmith, a digital media manager at Stevens Advertising in Grand Rapids.

“Everything is tracked from the amount of time an ad was seen, clicked, and it monitors how many people completed that conversion action that the ad is trying to call out,” Hammersmith said.

Hammersmith said that in 2017, the company used 76 percent of its budget on traditional ads and 24 percent was spent on creating digital content. However, he said the company also has clients who place their digital media in-house.

Diane Rivard has over 30 years of traditional advertising experience, and she is the traditional media director for Stevens. She said television still is the way many people look at their ads.

“All the headlines are always about the death of TV, but again, we need to look at the age groups,” Rivard said. “Typically, once we start getting to 35 and older, the audience still is very much in tune with television and the other traditional media. So, we can’t forget those pools, like the baby boomers, we don't want to forget about them.”

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