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As brands continue to spend more and more on digital advertising, oftentimes reallocating their budgets away from other media types, new data from Zenith’s annual “Advertising Expenditure Forecasts” shows that the spend in the digital sphere may be worth it now that internet advertising is more effective than ever.
Until two years ago in 2015, many brands spent on digital advertising, but their ROI was not as high as expected. But beginning in 2016, 34% of the global advertising dollars went toward internet advertising, resulting in a 35% production of ‘brand experience.’ Brand experience is defined by Zenith as a combination of reach and influence. (see below: source)
Now in 2017, Zenith was able to effectively analyze the return on investment from advertising spending in the digital sphere. Here’s a breakdown of the research from the past few years to demonstrate the effectiveness of ROI and digital ad spend:
- 2014: 27% of ad budgets spent on digital advertising with a 21% ‘brand experience’ return
- 2015: 30% of ad budgets spent on digital advertising with 30% ‘brand experience return
- 2016: Brand experience actually exceeded the amount spent on digital advertising, therefore making it an effective buy
- Zenith predicts a rise to 40% ad spend on the internet in 2018, increasing to 44% in 2020. Worldwide, predictions show that Sweden and the U.K. will contribute about 60% of their budgets to the internet, while Australia, Canada, China, Denmark, Norway and Taiwan will contribute another 50-60%.
As advertising spending overall continues to grow, Zenith predicts that internet advertising will drive this growth and account for 94% of new spends between 2017 and 2020. Interestingly, these dollars will likely be allocated to five of the most expansive digital platforms: Google, Facebook, Baidu (China), Alibaba (China), and Tencent (China).
The countries forecast to spend the most are the United States and China, totaling ad spend at 47% between 2017 and 2020. 57% of all new money spent on advertising is expected to come from the U.S., China, Japan, the U.K. and Germany.
According to Zenith, ‘big’ is the name of the game. With the most growth seen from big countries, big cities, and paid for ad time with big companies, it’s clear to understand why internet ad spend is expected to grow as much as predicted.
Programmatic Advertising in Europe
According to IAB Europe, programmatic advertising refers to the aggregate category of transactional mechanisms including:
- Automated Guaranteed
- Unreserved Fixed Rate
- Invitation-Only Auction
- Open Auction
The programmatic advertising market in Europe is worth approximately €8.1 billion in 2016, an increase of 42.7% over 2015 programmatic advertising budgets. In 2016, 49.9% of the total digital advertising spend in European markets was devoted to non-programmatic advertising, while 50.1% was devoted to programmatic advertising.
83% of the 2016 European programmatic budget was devoted to non-video advertising, while 17% was spent on video advertising. This translates to approximately €1.37 million spent on digital video advertisements, an increase of 155.1% over 2015 budgets. Desktop advertising was dominant in 2016, with 66% of the ad budget share, while mobile ads received 34% of the budget. The mobile ad budget in 2016 was €3.5 million, an increase of 87.8% over 2015 numbers.
Programmatic advertising spent on display (which includes video and mobile) accounted for 50.1% of programmatic advertising budgets in Europe. Further broken down, this budget was divided into 64.9% for mobile and 46.5% for video in 2016. By contrast, in 2015, 40% of programmatic budgets were devoted to display, with 53% going to mobile and a mere 22.8% going to video.
No matter what type of business or advertising you are focusing on right now, the important thing is that you have your eye and money on the digital marketplace. That is exactly why we are seeing more brands focus on blogging and content creation, while also moving away from traditional advertising methods like print and mail. Once a business starts focusing their efforts online, they soon start to realize the true ROI of their marketing efforts and dollars in action.