The US advertising market is undergoing a major transformation as digital advertising is set to surpass TV advertising in 2024. From a staggering climb in ad spend, reaching USD 634 billion in 2019, to a projected surge of USD 705 billion in 2021 and an estimated leap to USD 873 billion by 2024, the global advertising landscape is amid an unprecedented financial trajectory.
This shift reflects the changing consumer behavior, the advantages of digital advertising over TV advertising, and the rising popularity of streaming platforms and mobile devices. In this blog post, we will explore the factors driving this trend and what it means for the future of advertising.
Changing Consumer Behavior
One of the main reasons behind digital advertising growth is the changing consumer behavior of the audiences. More and more people spend time online, especially on social media, video platforms, and mobile apps, where they consume content, interact with brands, and make purchase decisions. According to a survey by Pew Research Center, 72% of US adults use social media, 81% watch online videos, and 85% own a smartphone. These digital channels offer advertisers the opportunity to reach their target audiences in a more engaging and personalized way, as well as to measure the impact of their campaigns more accurately.
TV vs Digital Advertising
Another factor that contributes to the shift from TV to digital ads is the difference between Digital vs traditional advertising in terms of reach, cost, and effectiveness. TV advertising has traditionally been the dominant form of mass media advertising, as it can reach a large and diverse audience with high-quality audiovisual content. However, TV advertising has limitations, such as high production and distribution costs, limited targeting and segmentation capabilities, and low interactivity and feedback. Moreover, TV advertising is facing the challenge of declining viewership as more people are cutting the cord and opting for online streaming services instead of cable or satellite TV.
Digital advertising, on the other hand, offers several advantages over TV advertising, such as:
Targeted Advertising Capabilities
Over 80% of internet users are more likely to click on an ad targeted to their specific interests. Digital advertising allows advertisers to target their audiences based on various criteria, such as demographics, interests, behaviors, locations, and devices. This enables them to deliver more relevant and personalized messages to the right people at the right time, resulting in higher conversion rates and customer loyalty.
Cost-Effectiveness and ROI
Anticipated to skyrocket by over 20% this year and the next, digital ad spendings is set to hit a remarkable $55.35 billion by 2024, painting a vivid picture of its digital advertising growth within the advertising industry. Digital advertising is also more cost-effective and efficient than TV advertising, as it requires lower production and distribution costs and allows advertisers to pay only for the results they achieve, such as impressions, clicks, leads, or sales. This means that digital advertising can provide a higher return on investment (ROI) than TV advertising, as it can generate more revenue for every dollar spent.
Real-Time Analytics and Optimization
Digital advertising also allows advertisers to track and measure the performance of their campaigns in real time using various metrics and tools, such as impressions, reach, frequency, click-through rate, cost per action, and conversion rate. This helps them to evaluate the effectiveness of their strategies, identify the strengths and weaknesses of their campaigns, and optimize their marketing budget allocation and bids accordingly. Additionally, digital advertising allows advertisers to test and experiment with different variables, such as ad formats, creatives, messages, and audiences, and find the best combinations that work for their goals.
Flexibility and Adaptability
Digital advertising is also more flexible and adaptable than TV advertising, catering to advertisers’ preferences to change and update their campaigns quickly and easily within marketing budget allocation or delays. This allows them to respond to changing market conditions, consumer preferences, and competitive actions and to take advantage of new opportunities and advertising industry trends. Furthermore, digital advertising allows advertisers to leverage the power of social media and user-generated content and to create interactive and engaging experiences for their audiences, such as quizzes, polls, games, and contests.
Rising Popularity of Streaming Platforms
One of the key drivers of the shift from TV to digital advertising is the rising popularity of streaming platforms. These platforms offer consumers access to a wide range of content, including movies, shows, documentaries, and originals, on-demand and across multiple devices, such as smart TVs, laptops, tablets, and smartphones. Streaming platforms offer advertisers new opportunities and challenges, as they have different business models and formats. The advertising formats on streaming platforms also vary, depending on the platform and the content. Some of the common formats include:
- Pre-roll and mid-roll ads: These are short video ads that play before or during the content, similar to TV commercials. They can be skippable or non-skippable and vary in length from 6 seconds to 30 seconds or more.
- Post-roll ads: These are video ads that play after the content, usually to promote another show or product. They can also be skippable or non-skippable and can vary in length.
- Overlay ads: These are banner or text ads that appear on top of the content, usually at the bottom of the corner of the screen. They can be static or animated and include a call to action or a link to a website.
- Display ads: These are banner or image ads that appear on the side or the bottom of the screen, usually next to the content or the menu. They can also be static or animated and include a call to action or a link to a website.
- Native ads: These are ads that match the look and feel of the content or the platform and are integrated into the user experience. They can include sponsored content, branded content, product placement, or content recommendation.
Mobile Dominance
Another factor influencing the shift from TV to digital advertising is the online advertising dominance of mobile devices, such as smartphones and tablets, as the preferred medium for accessing the internet and consuming content. With over 50% of global website traffic stemming from mobile phones and a striking 91% of consumers engaging with social media via their mobile devices, it's evident that a robust mobile marketing strategy integrated with social media is imperative for reaching and captivating your audience.
Mobile devices offer several benefits for both consumers and advertisers, such as:
1. Convenience and accessibility: Mobile devices allow consumers to access the internet and consume content anytime and anywhere without being tied to a specific location or device. They also offer a seamless and personalized user experience, as they can store user preferences, history, and data.
2. Variety and diversity: Mobile devices enable consumers to access various content and platforms, such as websites, apps, social media, video, audio, and games, and to switch between them easily and quickly. They also offer a diverse range of content and formats, such as short-form, long-form, vertical, horizontal, live, and on-demand.
3. Interactivity and engagement: Mobile devices allow consumers to interact and engage with the content and the brands, as they can like, comment, share, rate, review, and purchase directly. They also allow consumers to participate and create their content, such as photos, videos, stories, and posts.
Vajra Global: The Future of Advertising
We have to adapt to the changing advertising landscape quickly, as digital advertising is overtaking TV in the US advertising market and globally. Digital advertising offers advertisers the opportunity to reach and engage their audiences in a more effective, efficient, and measurable way and to adapt and optimize their campaigns in real-time. If you are looking for a reliable and professional digital marketing agency to help you with your digital advertising needs, look no further than Vajra Global. With a team of experts who have the skills and experience to create and execute effective and innovative digital marketing strategies, they can help you boost your brand awareness, generate leads, increase conversions, and grow your business. Whether you want to increase your online presence, reach new customers, or improve customer loyalty, Vajra Global can help you achieve your digital marketing goals.