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Digital will soon comprise half of media spending

Connected and fragmented landscape will challenge brands 

Spending on digital advertising is expected to comprise more than half of total advertising expenditure in the UK this year, an indicator of the significant shift happening in many media markets, including the US, the world’s largest.

This shift reflects the (slightly delayed) impact of digital on every aspect of the media value chain, an impact that is going to be even more dramatic in the next five years as the digital transformation of all media nears completion. At that point, all communications that can be practically delivered digitally will be delivered digitally, creating huge opportunities and challenges for marketers.

The digital transformation will widen the gap between media opportunities designed to create maximum impact at a mass cultural level (“tent pole” events) and those designed for millions of personalized interactions based on digital IDs. The decline in print revenues is already one of the signs of this disappearing middle ground of media. For brands, success means balancing the extremes of short-term performance and building long-term brand strength.

Mobile is already taking the lead in consumer screen time in the world’s biggest markets, led by Asia and Africa, but with the US close behind. As mobile inevitably becomes the control center for all connected systems of communications, it becomes the starting point for brands in terms of both understanding and engaging consumers.

The mobile-centric web is visual and bite- sized (e.g. Instagram). Video will continue to be the predominant media format, but will be delivered via a diverse system of platforms and content types – each with its own design specifications. This phenomenon is driven even faster by a greater share of content consumption moving from traditional linear TV to being streamed, and by the primacy of mobile as the leading connection point to the Internet.

Managing the complexity that comes from a landscape that is both highly connected and fragmented, therefore, demands a very different approach. Being able to build enduring audience profiles from digital data, the automated management of messaging and programmatic trading, are the table stakes for brands and media agencies.

As Phil Cowdell, Chairman of MediaCom North America says: “Where once it was all about the intelligent application of scale, the future is about the scaled application of intelligence.”