What really led the digital advertising boom

The truth is that both TV and digital advertising are both doing fine globally.


Tealfeed Guest Blog

3 years ago | 2 min read

Ten years ago, the popular opinion was that digital advertising, especially social media, will be the end of “traditional media” and that we all need to prepare for the online revolution.

Fast forward to today, TV is still alive and well, despite inflammatory articles that keep mentioning the how digital will end everything else (each year you have dozens of “specialists” forecasting the end of Apple and each time they announce record figures).

The truth is that both TV and digital advertising are both doing fine globally. That doesn’t really make sense, does it? Aren’t they fighting for the same piece of the pie?

No, they’re not. While TV is going after the “big bucks” from brands such as P&G, L’oreal, Samsung, Unilever, digital media makes up the majority of its revenue from small and medium advertisers. Not to mention companies that started out small and are now investing millions in Facebook & Google.

It’s value versus volume.

Reports from a couple of years ago mentioned that Samsung, one of the top Facebook advertisers, was spending around 100M$ per year on the platform in 2014. Seeing how Samsung’s ad spend was estimated at 4.3 billion dollars, most of them on traditional media, you can see why digital has a long way to go to capture a big chunk out of the top advertisers’ wallets.

Digital advertising managed to catch up by having no entry barrier and allowing anyone to spend their money to advertise — no matter if they were Starbucks or the hipster coffee shop across the street from the multi-billion-dollar business. That and the analytics that digital provided made it an irresistible offer.

Try talking to a local TV station or a billboard company if you’re a startup (with money to spend) or a SMB. Most of the time they won’t even respond. This is what Facebook and Google managed to change fundamentally — they gave control back to the people who are spending the budget

The duopoly in the digital ad-space is clear and will probably linger uncontested. This is mainly because media agencies and traditional media have been slow to play catch up with the digital giants.

In order to do this, the whole agency model needs to be changed. Offer transparency instead of hidden markup fees, build proprietary tools that actually improve a client’s advertising efforts (no, Marcel doesn’t do that) and stop being afraid to relinquish control. If not, control will be taken from you eventually.

The big question for agencies is if they want to go through another “adpocalypse” and lose money to these startups that are disrupting the ad industry, or if they are willing to play according to what will soon become the new rules of the market — transparency and accessibility.

I just hope the fear of change won’t lead advertisers to miss out on another huge opportunity like they did initially with the digital landscape.

This article was originally published by Matei Psatta on medium.


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