Last week, we released our full year study for digital ad spend in 2012, a key benchmark for the digital advertising industry. For the first time ever, the industry broke the £5 billion mark, a figure greater than some countries’ GDPs. This represented 12% growth year-on-year even within the context of a rather sluggish economic climate.
When discussing 2012 results last week, my colleague, Tim Elkington, our Director of Research & Strategy, aptly noted that it is “people power” that fuelled the industry’s growth in adverse economic conditions. Since people can’t live without devices - particularly smart phones and tablets, consumer adoption and passion for digital media helped digital advertising excel in an adverse economy.
Of course, nowhere is “people power” more true than in social media. Given that consumers spend more and more time following, friending and connecting in social media channels, it’s not surprising that advertising investment in social media has followed suit.
Social media was a strong contributor to the industry’s year-on-year growth, increasing 24% year-on-year, totalling £328 million. This continues a strong growth trajectory for social media ad spend over the past few years, and this shows no signs of slowing down - mainly because of people power.
Broad growth horizons
A closer look at display and video through a social lens illustrates the importance of social media advertising to the industry as a whole. In 2012, advertisers spent £289 million on banners in social, constituting an impressive 22% of overall display spend. Social also plays a strong role in video, with social video totalling £21 million - 13% of video spend.
Social’s significance in the digital advertising landscape is likely to continue to grow. When considering consumer appetites for digital video content and social communities, advertising in social - whether that’s banners or video or some format that hasn’t been invented yet - should continue to grow substantially. As social media adoption continues to go mainstream, smart marketers have stopped regarding the medium as something only for the “socially savvy.”
Meanwhile, technological advances from platforms and suppliers, along with the mobile revolution, have also continued apace. More refined location-based and audience targeting make it possible to give people the most relevant info and offers at precisely the right time they’re interested in them. Creative personalisation has also gotten easier and less resource-intensive, thanks to tech innovation.
Tech advances and widespread adoption mean that marketers will find it even more appealing to advertise in social media in the coming years. “More like this” is the likeliest way forward for 2013.