Question: How will the soft economy affect digital advertising?


Fact #1: 2012 Super Bowl inventory is sold out.

Fact #2: Traditional advertising is dying.

Last Tuesday, NBC announced it had completely sold out its Super Bowl broadcast inventory.

A nice note in an otherwise dismal couple of years for advertising. Worldwide ad spend tanked during the recession, side by side with the housing market collapse. In 2009, the industry experienced its worst single year decline since the Great Depression. Overall U.S. advertising plunged 12.9% that year according to Zenith Media.

But U.S. digital spend dropped only 3.4%. And as the recovery has slowly taken hold, digital has outgrown traditional by nearly 3X (7% to 20.2%).

It’s true that flagship events like the Super Bowl are not going away any time soon, but the rest of the traditional media world is in psychotherapy over how their analog dollars have turned to digital dimes.

But does that mean that just because you’re digital, you’re a winner? What does the continuing economic climate mean for the advertising business?

Our viewpoint is that the players that will survive today’s economy and thrive are the ones who can manage digital marketing more efficiently. What does that mean in practice? Brands need partners that can automate the marketing process, whether buying media or data. We expect we’ll see a winnowing this year. Companies with too many hands touching too many keyboards will try to sell before they go under, even ones with significant venture capital backing.

Another reality is that agencies are done with alphabet soup. They realize there’s a huge cost to constantly juggling vendors. As they account for wasted staff time, vendor integration headaches and all the other friction that goes with managing an army of partners, they’ll increasingly choose integrated platform providers with enterprise-class technology and service. They and their brands can’t afford the alternative.

By Shane Keats, Director of Product Marketing