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Online vs Offline Advertising Facts 2018

Last year worldwide digital advertising spend surpassed TV. In 2018, worldwide digital advertising spend will surpass ALL offline spend.

Analysts from the global media consulting firm, Winterberry Group have set 2018 worldwide offline media and marketing spend, at £70.04 billion; and digital media spend, £72.21 billion.

Closer to home in sunny Britain, this has been the case for some time. In fact, since 2015 digital spend has been greater than all combined ad spend.

Total Adspend

In research published by eMarketer, 55% of UK ad spend was invested in digital in 2017, and only 23% spent on TV.

eMarketer has also forecasted, in the same research, that by 2020, online ads will account for 60% of UK ad spend, with TV down to just 21%.

So why is this happening?

Well, in a nutshell; it works.

With digital advertising you get:

  1. Reduced Cost – Despite CPM’s increasing constantly, digital advertising is still drastically underpriced vs offline alternatives. This will continue to be the case until all of the worlds biggest companies move the majority of their marketing budgets to digital.
  2. Measurability/Quantification – With digital media, you can track the full customer journey from first ad view, through to purchase, subsequent purchases and everything in between. All in as much detail as you like. You can run experiments and get real data back, then tweak your campaigns in real time.
  3. Real-time results – As soon as a campaign is live, the results can start becoming evident very quickly. You can buy 10,000 ad clicks, or video views, then tweak the ads based on what the person did after they clicked the ad. This allows for super fast iteration. The appeal is obvious vs TV or Radio where you just have to cross your fingers that the 6-week campaign will generate results
  4. Targeting on steroids – Want to advertise to French males, aged 18 – 25 living in the south of England, who have an interest in cooking? No problem. What about people who need an emergency locksmith right now that is within 5 miles of their home? Easy. With digital advertising, you are only paying for the attention of people who you already know are likely to be interested in your product, service, event, youtube show, podcast… whatever it is you are promoting.

Traditional media agencies don’t like advising clients to move spend to digital for two main reasons:

  • It’s a lot more work – The work required to plan £100k of Facebook spend is 20 – 100 times more than buying a TV, Radio or Print spot or sponsorship. The level of detail in planning a campaign like that is unfathomable to traditional media execs.
  • They don’t fully understand it – The biggest margins are in TV, radio and print, so why would they bother to learn the intricacies of digital media planning where they are only making 20% margin instead of 70%? At best, this is short-term thinking, at worst, pure negligence.  

The downsides of offline advertising

The main downsides to offline advertising are:

  • Cost – In addition to the grossly inflated prices of the various placements (TV especially) you also have the heavy production costs of the video and audio, which seem to be artificially higher than the same service for online video and audio commercials. I imagine this is because the TV-native production companies have been financially raping their clients for years; so why break an old habit? That, and it’s probable that newer video creative shops are agiler than their traditional counterparts.
  • Attribution – It’s difficult to quantify the result from offline advertising. There is no conversion tracking, no cookies or Facebook Pixel to be seen.
  • Wasted Impressions – Offline advertising is rarely targeted in any meaningful way. Billboard, Radio and most TV spots do not have any targeting besides the area that they broadcast or are distributed in.

Also, the way that audience size is measured in the first place is flawed. Newspaper ad circulation, for example, is measured by taking the number of copies printed and multiplying it by two. On the assumption that the average newspaper is read cover-to-cover by two different people (complete unsubstantiated horseshit). Whereas with every online advertising medium you can see, in real time, exactly how many people have seen, clicked, watched, liked, shared or acted on any one of your ads.

If you want to dive into the stats, even more, these articles at The Drum are pretty good: http://www.thedrum.com/news/2016/03/10/uk-mobile-ad-spend-will-surpass-desktop-2016-account-1-4-pounds-spent-media and http://www.thedrum.com/news/2017/02/22/how-much-does-it-cost-advertise-uk-tv-heres-what-channel-4-itv-and-more-charge-slots and also to look at global numbers, you can get the headline figures from free from Statista https://www.statista.com/outlook/216/156/digital-advertising/united-kingdom#

Best,

Carlos

Photo by Štefan Štefančík on Unsplash

By | 2018-03-16T11:23:06+00:00 March 16th, 2018|Categories: Marketing, Resources, Social Media|0 Comments