In recent years marketing has made a dramatic transition. Whether your company is a franchise or a small startup, the value of digital marketing is reaching new heights. At the end of 2016, EMarketer.com reported that digital advertising would make up 37% of marketing spending this year. Why is this number significant? For the first time in the digital era, digital spending will supersede television spending. How did this happen?
Bang for Your Buck
Local commercials can cost anywhere from $200 to $1,500 (or more) for a 30-second advertisement. Nationally the rate trends much higher to over $340,000 for 30 seconds of ad space on a major program. For many companies these numbers feel staggering when you multiply out how many times that ad will run. This doesn’t mean they are ready to abandon traditional media, but they are likely to split up the pie more ways. What if I told you that $1,000 of social media budgeting could ensure that 100,000 new potential consumers see your product or service? Now start multiplying that number if you’re willing to spend!
Facebook has transformed from just a social network, to a business necessity. You’ve heard of display ads right? Did you know that Facebook is now the leading platform for display ad spending at $11.93 billion in 2016. Brands are now separating themselves from competitors with strong Facebook campaigns. With reduced rates and higher noticeability, social media marketing provides a favorable return for many companies. They don’t spend as much at once, and find that they are able to track exactly how many click-throughs and conversions are attributed to their budgeting. The return on investment is substantial, with results that make sense. With TV packages, more often than not, a company is paying a flat irreversible rate for a duration of time. Social media marketing offers solutions that allow you to pull or modify campaigns midstream. This can make a CEO feel a little better in with their spending.
Time to go Mobile
The popular Batman villain Bane said “it’s time to go mobile,” back in 2012. He was absolutely right as mobile spending rose a whopping 45% in 2016. Smartphones have completely changed the way we live life. If your product or service isn’t on the buyer persona’s phone then you could find yourself behind the times. On many social media pages we find that mobile users make up 70–80% of the pageviews. Digging deeper we find that a quick, mobile friendly video can add up to a 300% rise in engagement. Companies have found that short and relatable video offers an inexpensive and engaging way to relate to their target demos. In fact, the shorter the video the more likely brands are to engage. This is a far cry from when we depended on people to watch or listen to ads. As Millennials move into their mid to late 20’s we’re finding that they have become big spenders. Growing up with social media and DVRs, these users tend to enter a sales funnel through their social feed before most other avenues.
TV Isn’t Dying
Despite a heavy push for digital and social media marketing, this isn’t doom and gloom for TV stations. In fact they’re doing pretty dang well in netting an estimated $71.9 billion in 2016, which was just under digital’s $72.09 billion. Sporting events, awards ceremonies, and popular sitcoms continue to spike prices for advertisements within their networks. These channels aren’t going anywhere, and companies will throw down big money to be seen. However, with small to mid-range businesses popping up daily, they will look to get their brand known. When Millennials become the shot callers they’re going to be more likely to buy into marketing they know. When was the last time your younger friend actually sat and watched commercials without hopping on their smartphone? They will turn to popular digital marketing tactics that they relate with brands of familiarity. In the coming years I predict that TV dollars will continue to fall short in comparison to digital, and become more exclusive to only bigger companies. However, this doesn’t mean that they both can’t coexist.
Read more about these numbers and theory involving the digital transition at EMarketer.com.