Mark Twain once said, “The only two certainties in life are death and taxes.”
If he were here today, he’d add one to that list: brands using digital advertising.
The connected world—US households now have access to 25 connected devices—and e-commerce’s recent surge demands it.
Most advertisers know that, which is why digital ad spending continues to rise at an almost unbelievable rate.
By 2026, that number is expected to reach $876b.
To put this growth into perspective, advertisers spent just $26b on digital ads in 2010.
This growth of advertising is why it’s surprising that some advertisers, including those from brands like Amazon and Walmart, are just dipping their toes into parts of the digital advertising world.
Through June 2022, nearly 65k advertisers bought display, social or video ads for the first time.
Here’s how they spent those ad dollars and what their spending habits can tell us about the mindset of new advertisers.
Display Ads Are Still a Building Block
Just about any article on the future of digital advertising will omit display ads.
These more future-facing ad types are taking hold as consumers change their behaviors and advertisers search for better ways to combat increasing ad loads.
Despite what’s on the horizon, however, advertisers’ love for display ads isn’t going away.
In fact, you could argue it’s stronger than ever.
After growing rapidly in 2021, display ad spending is expected to grow by almost 21% this year.
We guess it’s true what they say about your first love.
Of the 65k advertisers we looked at, almost 77% of them bought display ads through June 2022.
For these advertisers, including thousands working in the Media & Entertainment industry to promote shows, video games and drama films, display ads are table stakes.
These advertisers spent more than $87mm on digital display ads.
The same can be said about those in the Services, Technology, Pharma, and Retail industries who contributed around $128mm more.
Said another way, if a campaign’s about the go live, display ads must be a part of it.
While the next wave of digital advertising is here, the status of display ads is still high enough to get them in the doors of brands like Amazon (The Legend of Vox Machina), NBC (News Brand Studio) and PureHealth Research Nerve ReGen.
For now, advertisers shouldn’t write off display ads.
Media & Entertainment Brands Are Printing Video Ad Dollars
The digital advertising world can be fickle, forcing brands to pivot quickly and adjust based on outside factors.
Based on our data, the fickle nature of advertising doesn’t apply to Media & Entertainment advertisers in terms of the type of ads they use to promote drama TV, games, mobile applications and other forms of entertainment.
Of the $1.3b spent by the new video advertisers in H1 2022, $923mm (81%) came from Media & Entertainment advertisers, including those promoting Fortnite Zero Build (video game), Lingokids (mobile app), and WeCrashed (drama TV).
As production companies increase spending in the wake of the pandemic and the industry gets out of its comfort zone (hybrid film releases on streaming services and in theaters are becoming common), the opportunity to pitch these advertisers will be plentiful.
The same goes for app and game developers trying to stand out in the app store and drive downloads.
That said, it’s worth noting that these advertisers likely fall outside the traditional definition of “new.”
While some may truly be working for startups or companies with limited budgets, many are seasoned pros simply promoting something new under a brand’s umbrella—for example, Amazon promoting a new show.
The distinction between “new” and “truly new” is important as their advertising experience will likely impact their budget and appetite for more innovative ad types, i.e., truly new advertisers may be less likely to experiment with new ad types.
For advertisers outside of the entertainment industry, like those in Beauty, Finance, Tech, and Retail, the lack of new video ad spending is likely because videos are already part of their strategies.
For advertisers in these industries, the opportunity for net-new video ad spend will come from actual startups or micro brands fighting for market share.
Not So Social
Despite social media’s size and proven performance gains, not all advertisers are investing.
The emergence of some of these major brands—many of which are led by teams with seasoned ad pros—could indicate that brands with big budgets are changing their strategies.
This could be the result of younger generations gravitating to certain social channels—think Snapchat, TikTok and Instagram—and the desire of these brands to reach them.
Remember: These generations rely heavily on social media and influencers to make purchase decisions.
New Advertisers Default to Digital
The nearly 2,000% increase in digital ad spending since 2010 proves its impact.
Moving forward, advertisers will default to digital and use these channels to drive their campaigns.
The question is: Can you have too many digital ads?
To these advertisers, the answer is a resounding no.
To put this into perspective, 86% of new video advertisers invested only in digital channels, while 90% and 88% of new display and social advertisers did the same.
There’s no arguing with advertisers ready to invest every penny in digital, but the digital-or-nothing mindset indicates that many advertisers are writing off traditional formats like print and TV.
For some advertisers, that could be a strategic mistake.
Advertisers Are Leaving Money on the Table
The key takeaway here is this: advertisers aren’t taking full advantage of their options.
The display-heavy strategies signal that advertisers still see these ads as building blocks.
There’s nothing wrong with this—although there are more exciting formats available—but if their infatuation with display blinds them from seeing other options, they could be doing themselves and their target audience a disservice.
At the same time, the digital-only strategies suggest that many advertisers are writing off traditional formats.
It’s impossible to say why advertisers aren’t exploring these avenues, but for some of them, they’re leaving money—and performance gains—on the table.
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