business news in context, analysis with attitude

The Washington Post this mornin g reports that “this year, the money spent on digital advertising in the United States will surpass that spent on traditional ads for the first time … representing a landmark inversion of how advertisers budget their resources and highlighting the rise of digital media as platforms seek consumers’ attention.”

The numbers come from eMarketer which “expects companies to spend nearly $130 billion on digital ads, compared with about $110 billion on traditional advertisements, or about 54.2 percent of the ad market vs. 46.8 percent, respectively … By 2023, digital ads will capture more than two-thirds of all ad spending, according to the estimates.”

The story goes on: “The increase in digital ad dollars will come, in part, from sharp declines in key print ad formats including directories such as the Yellow Pages, whose ad spending will fall by 19 percent, and the print versions of newspapers and magazines where ad spending is expected to decrease by about 18 percent, eMarketer said. Ad spending on TV will decline 2.2 percent this year, to about $71 billion, eMarketer said, owing largely to the absence of elections and big sports events, such as the Olympics.”
KC's View:
MNB took note the other day of a Bloomberg report on how retailers, inspired by Amazon’s success in converting its massive amounts of data into manufacturer advertising dollars, “are quietly courting big brands with a sales pitch that goes something like this: Facebook might know what your customers like, and Google might know what they want, but only we know what they actually buy.” When advertisers buy into this argument, as they do, it only hastens the move away from traditional print ads and toward digital. (Retailers are doing it in part because the ad revenue helps fund all the expensive initiatives they have to undertake in order to compete in the current climate.)

Some businesses seem to be adapting, while others (like the Yellow Pages, best I can tell) are not. I look at newspapers like the New York Times and the Washington Post as great examples of companies that seem to have adapted to the new world order and have created new products and incentives that drive digital audiences and sales. Both seem to be thriving.