The advertising landscape has changed rapidly over the past three decades. With the exponential increase in the use of digital technology, it is not surprising that digital channels account for more than half of the total ad spend.
Social media, video, e-commerce, and search has mushroomed over the past 10 years at the expense of conventional channels such as TV and print media.
There is a sharp decline in TV ad spend over recent years which is due to the increase in social media and online ad consumption.
According to Statista, global advertising spend for television has decreased from $201B in 2010 to $160B in 2020 and the same for newspapers has decreased from $97B in 2010 to $31B in 2020.
The rise in consumption of video content on YouTube and OTD platforms has shifted the attention of marketing agencies. Newspaper and magazine ad spends have also plummeted to unprecedented levels.
And then came the Corona pandemic which acted as a catalyst in the marketing industry.
Although there is a metric rise in search ad spend in recent years, there is a massive shift in the trend of online content consumption which has doubled since the start of the pandemic which is likely to fuel its growth in the coming years.
With the rise in daily smartphone users, more netizens added every day, and stay at home culture forced by the pandemic, there is a huge rise in online content consumption and social media activities.
More people are actively and attentively participating in online platforms which have increased in time spent on screen and time spent on consuming TV and digital video.
This can be seen from the Statista study where the global digital advertising spends for display ads has increased from $27B in 2010 to $152B in 2020 and expected to rise in the future.
It’s clear that priorities are realigned and budgets have shifted, with digital channels now accounting for more than half of total advertising spend.
It is not only the advertisers spending money online but consumers are also expected to be spent online as a result of the 2020 pandemic. It is expected that more than $183 billion will be spent online by consumers due to the COVID pandemic.
People are spending many of their waking hours in front of a screen. Globally, the daily average of time spent online was almost 7 hours during the pandemic, which was significantly more (almost double) from 3.2 hours at the beginning of lockdowns.
This change in lifestyle demands new marketing strategies and budgeting priorities by advertising agencies to increase interaction touchpoints with the consumers.
Social media and digital ad spend are also consistent with a steady rise in global smartphone ownership and usage. It is estimated by Statista that there will be 1.13 billion smartphone users in China by 2025 which will be nearly 14% of the world’s population by 2025.
Also, 81% of U.S. residents owned a smartphone in February of 2019 and it is expected that 291 million Americans (increasing to almost 90%) will be using a smartphone by 2024.
As billions of users spend hundreds of their waking hours with their small screens every year, it’s important for mobile-based ads to spend—including apps like TikTok, Snapchat, Instagram—to become even more mainstream.