SUMMARY: Global digital advertising growth is expected to accelerate to about 18% year-over-year during 2021, up from about 10% growth in 2020 — and continue to show annual growth in the low double digits over the next five years, according to Cowen’s 9th Annual Ad Outlook report. Most disheartening is the continued use of Facebook and programmatic online ads.
The Cowen’s 9th Annual Ad Outlook report is based on a survey of 52 senior U.S. ad buyers responsible for combined spend of $15 billion.
Looking at specific platforms, buyers indicated that Google and Facebook will continue to dominate for the foreseeable future, accounting for a combined 27%, on average, of global digital spend by 2022. This is not a well thought out strategy.
Yesterday I talked about brands‘ need to hold Facebook accountable for all their lying and contributions to right-wing violence. In short, Facebook has no motivation to change its ways when the ad dollars are flowing in by the bushel.
Amazon is growing as well
Amazon will gain the most share of the digital ad budget share. On average, Amazon’s share of their U.S. digital ad spends, on a weighted basis, will increase from 7% last year to 11% by 2022. Amazon’s U.S. ad revenue is expected to reach $26.1 billion this year and $85.2 billion by 2026.
in the third quarter of 2019, Amazon’s ad revenue shot up to $3.6 billion. That means that as now, Amazon’s entering the ring with paid media giants like Google and Facebook.
- 90% of online shoppers use Amazon to check on prices. (Big Commerce)
- 72% of consumers use Amazon to discover new products they may be interested in. (CPC Strategy)
- 54% of online shoppers look on Amazon before looking anywhere else. (Retail Dive)
Reports have shown that some marketers are even moving 60% of their advertising budgets out of Google, and into Amazon. It’s no secret that this is the platform to be on for eCommerce brands especially with more people working from home.
The challenge with advertising on Amazon is that everyone is now spending money on the site which is leading to more clutter that consumers are tuning out.
Programmatic Problems
Then there is the programmatic problem. A new report from NewsGuard, a service that uses trained journalists to rate news and information sites, found that from Oct. 1 through Jan. 12, nearly every major brand in America inadvertently ran automated ads on websites that peddled election conspiracies and misinformation.
Because programmatic advertising is bought and sold through a highly-convoluted supply chain, there’s also a lot of fraud and accidentally-misplaced ads.
Digital spending, overall, will increase but what’s flat, or even declining, is the ROI on digital spending. The ROI is declining because online creative is generally pretty bad, and consumers are getting overwhelmed with online ads and using ad blockers to tune them out. Programmatic ads are ripe with fraud, and ads often appear where brands don’t want to be.
