Most Marketers Believe Digital Spend Will Soon Overtake Traditional Media

ThinkVine-Marketer-Beliefs-Traditional-v-Digital-Spend-Apr2014Despite signs that budget shifts from traditional to digital media may be slowing, most marketers believe that their spending on digital marketing will soon exceed their traditional media spending, if it hasn’t already. That’s according to newly-released results from a ThinkVine survey fielded among 200 senior-level marketers, which found that digital has already surpassed traditional media in spending for one-quarter of respondents. An additional 31% believe their digital marketing spend will exceed traditional this year (15%) or next (16%), while only 14% feel that the shift will not take place in the foreseeable future (11%) or ever (3%).

Some verticals appear to be making the shift more quickly than others, as more than one-third of respondents in the insurance (40%), entertainment (38%), finance (36%), and technology (35%) sectors already claim to already dedicate a majority of their budgets to digital marketing. It should be noted that when broken down into individual sectors, the sample sizes are very small and should therefore be treated with caution.

Marketers’ projections are bullish in relation to survey results released last year by Webmarketing123, which found respondents indicating that they spent on average one-quarter of their budgets on digital marketing.

Another indicator of where digital stands: according to Ad Age, digital represented 35.3% of US agency revenues last year.

For digital budgets to challenge or overtake traditional media budgets, marketing dollars will need to be siphoned away from TV, the largest advertising medium in the US. And that’s exactly what a newly-released IAB survey [pdf] indicates is happening: the study, produced with Advertiser Perceptions, finds that among marketers and agencies increasing their video ad spending, two-thirds will draw those budgets from TV.

While respondents to that survey – all of whom are involved in digital video or TV advertising decision-making and have at least $1 million in total annual ad spend – are enthusiastic about digital video spending, their projections currently appear out of line with the reality of the advertising market. Respondents were asked to imagine that the TV and digital video ad budget for their biggest or most important product or service is a pie, and that each of the types of video advertising is a slice. Respondents anticipating allocating 46% share to digital video versus 54% for TV last year, with this year’s pie being essentially split (51% TV; 49% digital video).

That signals the growing importance of digital video advertising, of which there is no doubt. But the money is yet to flow there in as serious a manner as those survey results might suggest. As of 2012, for example, TV advertising in the US was a $63.8 billion market (see the PwC chart referenced above), while digital video advertising was a $2.3 billion market, according to the IAB and PwC. So despite online video’s strong growth, there’s still a ways to go before it comes close to the TV advertising market.

About the Data: The ThinkVine survey polled 200 CMOs, marketing vice presidents and directors at companies with less than $100 million (17%) to more than $1 billion (36%) in brand revenue about their marketing budgets and spending projections.