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  • Digital ad spend on the up

Digital Ad spend – much too much, much too young, a band once said, so who’s singing to the right tune?

07 October 2016

In the spending tug of war between digital and TV, digital are getting plenty of extra hands on their side.

As more people move away from traditional TV and towards online sources of entertainment, so too have brands followed this culture change, shifting their ad budgets towards the smaller screens more and more every year.

Some industry fortune tellers are not just hinting at the idea of total spend on digital surpassing TV, but say it will happen as soon as next year. 

UK internet ad spend was up 17.3% last year, according to the Advertising Association and Warc’s report on annual expenditure, which outshone the overall market’s increase of only 7.5%.

But like a world class trapeze artist, brands need to find the right balance in their ad spend, or risk a dodgy wobble.

Procter & Gamble are a recent high-profile example of a brand rethinking the popular ‘More, More, More’ approach to online ad spend, after annual sales dropped by 8%.

Speaking to the Wall Street Journal, Marc Pritchard, P&G’s Chief Brand Officer, said that they “targeted too much, and went too narrow”, and are now rethinking ways to get the best mix of reach and precision.

The options for targeting a specific age range, set of interests, location, and shopping habits, among yet more variables, are useful for brands going for specific segment of an audience (if a little bit Orwellian), but casting a wider net to larger audiences can’t be overlooked, especially for juggernaut brands like P & G.

While P & G have asked the question of digital spending, they won’t necessarily be cutting their budget, merely rethinking how they can use it better.

WPP’s CEO Sir Martin Sorrell has been more vocal, hitting out at Google and Facebook being both ‘the players and the referees’.

Providing the platform hosting these ads, while simultaneously being the gatekeeper for analytics on said platforms gives them a lot of power.

While coming from a business providing rival analytics services for both platforms, there’s still truth to his words.

Facebook have steadily adjusted their business model and news feed algorithms over the years to make sure brands have less organic reach, and are more reliant on paid options.

But are brands spending too much on digital?

A large portion of the spend comes from the big players, who have the money to keep their content marketing machines chugging along, but even the biggest brands may be putting too many of their eggs in the digital basket.

It all comes down to what a brand wants out of their advertising efforts.

FMCG brands who lack an online retail presence, for instance, may be better looking at a wider awareness campaign, and if they have the budget, balancing budget between whichever channels has the highest numbers of your specific audience is right, whether that’s TV or digital. 

If you are going digital-centric, and a heavily content-based approach at that, then you’d still need to strike a balance between quality, entertaining creative, as much as picking out the specific people.

After all, interesting content, shared organically, is better than uninteresting content targeted relentlessly.

And you don’t want to do a McDonalds – their big budget content-focused Youtube channel ‘Channel Us’ launched last year, aimed at the 16-24 audience with well-known Youtube stars.

It’s now effectively shut down, only 12 months later. 

Even the big boys miss the mark sometimes.

 

Strawman Says

Interesting Content is King, whether it’s on TV or digital. Despite increased spending, not everyone’s focused on digital, and depending on your audience, you might not be either.