Over the past couple of years there has been a growing body of research demonstrating a shift in marketing spending from traditional to digital media (examples here and here). But new signs are emerging suggesting that the pace of that shift is slowing: Duke University’s most recent CMO Survey found pessimism around future traditional ad spend easing, while a new report from the Society of Digital Agencies (SoDA) reveals that one-quarter of global client marketers this year planning to reallocate existing budgets into digital, down from 39% last year. Another 14% are increasing their digital marketing budgets amid an overall increase in marketing spend, but the prevailing mood appears to be maintaining the status quo, which counts as the plan for half of this year’s respondents, versus about one-third last year.
Separately, the IPA’s Q1 2014 Bellwether report, which tracks marketing spending trends in the UK, found a more positive growth trajectory for main media (traditional channels such as TV, cinema, radio and press) than the internet, for the first time in slightly less than 3 years. The survey subtracts the percentage of marketers expecting to decrease spending from the percentage expecting to increase spend, arriving at what it calls a “net balance.” In the Q1 report, that figure was 11.5% for main media, versus 8.5% for the internet.
The authors of the SoDA report suggest that the slowdown in budget reallocation plans may be due to “clients… likely holding tight to current plans, waiting to see if last year’s digitally-focused initiatives yield the positive impact anticipated during the 1st half of 2014.”
For the time being, traditional media still grabs the bulk of global advertising dollars, according to ZenithOptimedia, led by TV (40.1% share last year) and newspapers (16.9%). Digital advertising comprised an estimated 21% share of total ad spend last year (18.1% desktop internet; 2.7% mobile internet), but is expected to grow to 27.1% share by 2016.
Within the US, the world’s largest advertising market, TV remains the largest advertising medium, a position it is expected to hold on to through 2017 despite a big increase in spending on internet advertising, per PricewaterhouseCoopers forecasts.
Interestingly, the SoDA study shows that budgets might be flowing to digital initiatives beyond the traditional marketing space. Roughly one-third of client-side respondents are investing more in digital efforts that aren’t directly marketing-related, describing these as “digital products, IT/development, customer insights and analytics, intranets and other internal applications.”
About the Data: Conducted by Econsultancy, SoDA’s 2014 Digital Marketing Outlook Study had 736 respondents. Over 82% of respondents were key decision makers and influencers (C-Level, Senior Executives, VPs and Directors) with annual marketing budgets ranging from US$5M to over US$100M. The percentage of respondents based in North America was 36%; respondents from Europe accounted for 22% of the overall sample; while the share of APAC respondents accounts for 21% of the total.
Clients (including both B2C and B2B executives with responsibilities for digital) accounted for 42% of the total respondent base, while agency and production company respondents constituted 43% of the overall sample.