Digital Advertising Races Ahead Of Traditional

2019 brings us many changes with a major one being that this will be the first time that the costs for digital promotions will supersede the budget of traditional advertisements in the United States of America. Not only does this show a positive impact technology has made on the advertising sector of the commercial world, but it also shows an increased preference for businesses to opt for digital media instead of the conventional means to promote products and services, e.g., newspapers, radio,TV, etc.

Monetary comparisons between digital advertising and traditional advertising for 2019 (USA)

Expenditure on digital advertising at the end of 2019: $130 billion.

Expenditure on traditional advertising at the end of 2019: $110 billion.

Percentage of the market to be captured by digital advertising: 54.2 %

Percentage of the market to be captured by traditional advertising: 46.8%.

It is estimated that in 2023, two-thirds of the market shall be dominated by technological forms of marketing.

Main reasons for the decline in traditional advertising in 2019

Directories like newspapers and YellowPages faced a heavy decline in readership in 2018. The percentage of peopleutilising the conventional means of advertising is looking to drop further in 2019. In 2019, Yellow Pages' readership is expected to fall by 19% while newspapers' readership is predicted to decline by 18%. One major reason behind this prediction is the lack of vital events in the US for 2019; no elections and no Olympics.

Who are the winners and who are the losers?

Even though tech is driving the market in the 2010s, it doesn't mean that every digital franchise will be capturing an equal slice of the pie. Google and Facebook—the 2 tech giants of the USA—are expected to maintain a whopping 59% of the market share for 2019. Despite Google's share forecasted to drop (from 38.2% to 37.2%), Facebook's share will be unaltered and might even increase this year (from 21.8% to 22.1%).

You might wondering why Facebook's share is rising and not falling due to the privacy scandals that have shaken the company recently. However, Instagram—a popular social media network which is owned by Facebook—will be the main reason for Facebook's rise in market share in 2019. With Instagram Stories being one of the primary causes for this social network's surge in popularity for this year.

In addition to Google and Facebook, the list of the top five is completed by Amazon, Microsoft, and Verizon.

What does this mean for Agency business?

Traditional agencies are under pressure world wide and they are aggressively trying to augment their digital skills either by developing internally, acquisitions or partnerships. WPP share price decreasing in the last year by a whopping 40% is a testament of the storm that traditional agencies find themselves in. With Google and Facebook both investing heavily in AI to optimize campaigns as well as third party tools; margins in digital marketing will be squeezed further. Centric is working diligently to partner up with these companies to not only drive relevant traffic but also is experienced in building digital platforms where individual personas view different content (Dynamic in-session content) for increased conversions.