The business of advertising is being transformed.
Consumers are choosing new communication technologies to network with others and to consume news, information, and entertainment on the platforms they choose at the times they want. We are witnessing a seismic shift in consumer media behavior, along with a much slower realignment of advertising budgets. eMarketer projects that spending on digital advertising in the United States will reach $23.6 billion this year, which represents about 14.4% of total advertising spending of $163 billion. Advertising spending exclusively on social networks is pegged at $1.3 billion or about 5% of total digital advertising spending for this year. Advertising on social networks is projected to reach just $1.6 billion by 2013. eMarketer projects that overall spending on digital advertising will grow to $34.0 billion in 2014, meaning that the actual percentage of ad dollars spent on the social networks will remain about 5% of total digital ad spending in the United States.
But, it’s clear that consumers enjoy social media. In fact, a recent study from the University of Maryland and reported in the Chronicle of Higher Education, indicates that students exhibited “addiction like withdraw symptoms” when asked to give up all media for a full day. What is not as clear is how social media will be supported. With a reported 400 million registered users, Facebook and a handful of other players can survive on advertising. Many other social media networks, however, will need to explore revenue strategies beyond advertising.
What do these changes mean to the business of advertising? Be sure to add our RSS feed so you can read all three parts of this thought-provoking series coming this week. Can’t wait? Here’s a presentation I’m doing for the Bowling Green, Kentucky Professional Marketers Association on 6.15.10. See: http://adthinktank.com/pma/pma.pdf
Prologue: Online Resources
Razorfish Feed Report: http://feed.razorfish.com/
Razorfish Fluent Report: http://fluent.razorfish.com
Social Media Revolution 2: http://www.youtube.com/watch?v=lFZ0z5Fm-Ng&feature=related
TelecomReport. “Social Media: Fiskars” http://www.youtube.com/watch?v=uF-m6_AYr2M
