By Chris Mueller, Cosmitto Content Strategist
A pendulum has officially swung within the U.S. advertising industry. For the first time ever, digital ads are now considered king over radio, television, and newspapers when it pertains to spending.
Frankly, the future is now.
In 2019, U.S. digital ad spends will finally exceed non-digital (traditional) spends, after eMarketer’s latest forecasts projected that digital will account for 54.2 percent of the market while generating $129.34 billion — a 19-percent increase from last year. Furthermore, by 2021, total online revenue is expected to make up two-thirds of the market with a whopping $172.9 billion in spending.
This is largely due to tech powerhouses Facebook, Google and Amazon—in that order. Google and Facebook’s consistent dual-dominance of the market will continue into 2019. The duo is expected to account for 59.3 percent of U.S. digital advertising. Amazon has created a triopoly at the top of the digital advertising realm. Jeff Bezos’ trillion-dollar corporation increased its digital advertising rate from 6.8 to 8.8 percent in the past year, while Facebook’s share grew to 22.1 percent (primarily due to continued effects of its Instagram acquisition in 2017) after its 2018 third-quarter earnings reported that over one billion “Stories” are shared daily across the Facebook, Instagram and WhatsApp platforms.
The dominance of Facebook, Google and Amazon indicates that the blurred line between search, social and eCommerce advertising will likely remain intact. In whole, the triopoly will be responsible for 68 percent of the digital advertising market. Facebook and Google combined for 60 percent last year, meaning Amazon’s emergence should not be considered the tipping point. However, it provided a positive change of pace for advertisers, offering an alternate B2C advertising platform targeting a wide range of consumers shopping online.
“The platform is rich with shoppers’ behavioral data for targeting and provides access to purchase data in real time,” said eMarketer forecasting director Monica Peart in the report.
“This type of access was (previously) only available through the retail partner to share at their discretion.”
So, why is traditional advertising tanking? In short, consumers aren’t engaging with TV, radio and newspapers the same way they were 20 years ago. Digital has completely taken over, in large part to the continuous wave of mobile technology that creates infinite accessibility to consumers. For example, eMarketer estimates that over 171.3 million people in the U.S. will be using mobile messaging apps by 2022.
Print newspapers and magazines are expected to see an 18-percent decline in advertising, while TV ads will decrease for the second straight year — this time by 2.2 percent in 2019 — without a presidential election or the Olympics to boost ratings.
OTHER 2019 DIGITAL AD TRENDS
Advertising on Instagram/Facebook Stories
Over the last two years, Stories have rapidly become one of the most popular aspects of Instagram and Facebook. Why? They alleviate pressure from society’s “highlight reel” culture that sets an exceedingly high bar of what’s acceptable to post and what’s not. Everyone loved showing off their fancy dinner plates or luxurious vacation photos. But, in reality, a majority of people weren’t eating at 5-star restaurants or taking trips to the Cayman Islands — which meant Instagram and Facebook weren’t maximizing their usage potential.
So, they found a solution by copying Snapchat’s Stories model and improving it. The posts disappear 24 hours after they’re posted and offer users an alternative to the traditional photo feed. It worked. In 2018, Recode.net reported that Instagram’s implementation of stories attracted more than 400 daily users, while Snapchat’s user rate simultaneously decreased for the first time since its creation in 2014.
As the popularity of Stories continues to rise, so will their capability as an advertising platform. There could come a time where Instagram implements unskippable ads similar to Youtube and Snapchat.
Amazon’s rise to becoming the third biggest digital advertising platform can be looked at as a sign of more to come. Other prominent online retailers like Wal-Mart, Target, Dick’s Sporting Goods and eBay could follow suit by optimizing their websites and mobile apps for more digital ad placement.
Further monetizing of their websites will allow these smaller online retailers to keep up with Amazon’s dominance so they can stay afloat in the digital advertising realm.
2020 Political Advertising
Major advertising dollars were spent for the 2018 mid-term elections, and the upcoming 2020 presidential election will be no different. For the mid-term elections, the Indianapolis Business Journal reported that an estimated $1.8 billion was spent on digital ads, with 60 percent going toward social media advertising on Facebook, Instagram, Twitter, Snapchat and YouTube. According to Hubspot’s Political Ad Spend Campaign Report for the 2018 mid-term elections, a combined $256 million was spent by the Republican and Democratic parties on local broadcast advertising for the “top 10 senate races to watch.”
The 2020 presidential race will be a mine of digital advertising opportunities. However, political advertisers will need to know what works and what doesn’t in order to identify which platforms to emphasize based on their target demographics. So, expect an ongoing firestorm of political ads to begin in 2019.