Digital Media Spend Remains Traditionally Focused

June 15, 2010

The breakdown of media spend in digital is focused mainly on traditional online media choices, according to a recent study from digital marketing agency Razorfish.

Highest Percentage of Digital Ad Spend in Established Online Media
Online media outlets that have existed for a long period of time, such as verticals, search, ad networks and portals, received the bulk of digital ad dollars spent in 2009. Verticals and individual sites received the highest share of digital ad spending, slightly more than 30%. These were followed by search sites and directories (25%), ad networks (20%), and portals (about 12%).

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No form of “new media” even obtained 5% of digital ad spending in 2009. The most popular form of new media, social media display, received about 4% of digital ad spending. Data brokers, ad exchanges and mobile all received about 2%, with other new media such as non-display social media and digital out-of-home (DOOH) barely registering. Interestingly, email, arguably the oldest form of traditional digital media, had one of the smallest shares of ad spending.

New Media Attracts New Investors
Perhaps not surprisingly, a large portion of the advertisers spending money in many new forms of digital media were investing for the first time, while most spenders in traditional forms of digital media were building upon established investments.

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Virtually all DOOH investors in 2009 were new, as were about 80% of ad exchange and data broker investors, as well as more than 60% of social media non-display investors. However, only about 45% of social media display investors in 2009 were new, with new investors in mobile and in-game advertising totaling about 20% for each media type.

Ad networks had the highest percentage of new investors among any traditional form of digital media in 2009 (20%). Email, which attracted very low digital media investment in 2009, had no new investors. This statistical combination suggests email advertising may have poor growth rates in the years to come.

Spend Increases in Variety of Digital Media
During 2009, ad spending increased significantly in the traditional digital media form of ad exchanges and networks, as well as in the new digital media forms of data brokers, mobile and social. Several of the digital media forms with the highest share of overall spending, including search and directories, verticals/individual sites, and portals, had relatively low rates of increased spending and high rates of decreased spending. Email showed no decreased spending but very little increased spending.

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Social Media Spending Hard to Measure
Razorfish predicts that more dollars will go into social media advertising, but it will be hard
to measure as most of those dollars will not go toward ad impressions or clicks. Brands will
have to come to terms with two types of social investment. First, they will have to invest in people more than media. Second, even the best social strategies need support, so media dollars will need to be spent on other types of media to build stronger communities and programs.

B2B Marketers Have Little Social Media Engagement
A relative lack of B2B marketing engagement in social media may be one driver of its low ad spend performance in 2009, according to a recent study from digital marketing firm White Horse. Almost 60% of B2B marketers have little or no engagement in social media. A combined 59% of B2B marketers have only a basic social media presence (45%) or are not actively engaged in social media marketing (14%). In contrast, a combined 44% of B2C marketers have only a basic social media presence (26%) or are not actively engaged (18%)

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