Think Mini when you think digital

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October 8, 2017 by

Think Mini when you think digital

The digital sector in the US continues to grow. The latest figures from The IAB Advertising report for 2016, as published in Advertising Age, show that advertisers spent a record $US17.6 billion in the third quarter of 2016 on the digital medium. The figure represents a year on year increase of a healthy 20%. 

But all is not as it seems in the digital world with dramatic movements in the delivery of the digital medium. Simply put, the move is very much towards mobile at the expense of your trusted PC and other online delivery platforms. It is expected that when the final figures are tallied in the US for 2016, mobile will finally overtake desktop in digital ad spending. Mobile already sits at 47% of digital advertising expenditure with the only growth for non- mobile being video, whilst such areas as search and display, according to the article in Advertising Age, showing decline.

It is reasonable to expect that the swing to mobile, within the digital medium, will only strengthen both here and in the US, when even faster delivery of mobile data becomes a reality. The introduction of 5G,which according to Telstra, will be rolled out sooner rather than later to a mobile tower near you. 5G will dramatically increase download speeds, when compared to the current 4G standard. Research is also currently underway in the US into the 6G standard, which will not only dramatically improve download speeds but also interactive speeds.

Whilst, the digital mediums, in all their forms continue to experience growth, 50% of that advertising expenditure is still slated for the search category. Now we know where all that advertising expenditure that was previously spent on newspaper classifieds, Yellow Pages etc has found as a new home. Another source of revenue growth for the medium would be the billions of dollars previously allocated to the print brochure, which is now electronically generated at a vastly reduced cost. Most marketing departments are by nature reluctant to reduce their overall annual budget allocations so a redistribution of funds would not be uncommon.

The heavy concentration of expenditure in the search arena of digital seems to slot that element of the medium, a little way down the track in the purchase decision making cycle, when compared to traditional mass media.

In the latest IAB Advertising figures there is also some disturbing news for the giants of the search industry (Google etc) as they see their revenue levels from search advertising expenditure in 2016 flat line compared to 2015. According to the Advertising Age article, this flat lining of search advertising expenditure may be a result of a fundamental change in the use of the digital medium by consumers who are now more likely to begin their ‘discovery process with specialised apps and not the open mobile web’, currently dominated by the digital giants. If this is the case, then it is another superb example of both the creative and destructive forces of technological change, where not even the Google’s of the digital world are exempt. 

Another recent disturbing trend in the USA for the digital search engines and advertisers is shown by an independent research survey that shows that for ‘product’ searches American consumers now turn to Amazon rather than Google. According to the survey, in December 2016, 52% of product searches took place on Amazon, compared to 26% on search engines, including Google. This is a dramatic shift compared to December 2014, when the same survey saw 55% of product searches taking place on search engines and only 28% on Amazon. Should Amazon decide to dramatically increase their presence in the Australian retail market then it is reasonable to conclude that a similar situation will occur down-under. 

As the American’s would say, the main takeaway from the latest IAB data is that when you are designing creative for digital, keep the ‘mini’ sized five inch mobile screen ‘top of mind’, as this is where you will probably end up.