Although all of digital grew +29% for the first three quarters of 2015 year-over-year (YOY), the fastest growth in this overall sector came from social, up +78% over that period. Digital video pure play is up +50%, while TV network digital is down -6%. However, looking at it quarter by quarter, TV network digital was down -12% for each of the first two quarters of 2015 and then was up +7% YOY for the third quarter, so the trend for that subcategory is currently up again. And it's the third largest category with 9.1% of total CPG digital dollars.
What do these numbers tell us? CPG advertisers have reason to believe that social is working for them. There have been some excellent ROI studies done by Facebook and Datalogix, which however did not include TV, so there could have been some accidental misattribution. Nevertheless, anyone who does ROI studies always grows revenues; the two go hand in hand. We would expect to see even better research in the future, and greater gains for social, especially native social — meaning content that looks natural in social media pages because it is actually social in nature and yet at the same time builds a specific brand bond. This is where we see the greatest future strength of social.
The same would seem to be true of digital video. We know that Eyeview Digital has been doing excellent studies of the ROI of digital video and programmatic television and we expect to see even more of that in the future from industry leaders and increasingly from everybody. This is my explanation for why CPG, which is very research oriented, is doing what it is doing.
Faster than digital video, there is another subcategory called Other, which is growing at +71%, almost as fast as social. What's in there? "Other" is all of the most experimental and inherently hard-to-classify ideas, including native social. In 2006 my colleagues and I published the results of 28 studies showing the high ROI and persuasion effects of what we called True Sponsorship, which is today being called native. (Ten years is about average for salient findings to be fully activated by the industry.)
Native has an enormous future not only in digital but in TV, where there will be a predictable return to the roots of TV: True Sponsorship, including entertainment content developed by advertisers and agencies. No form of ad blocking can touch this form of persuasive communication. It does not trigger mental antibodies. It is transformative communication where the brand expresses genuine and desirable qualities that its customers share and so absorb the information in a positive way.
Why the temporary dip in TV network digital in the first half of 2015? I was baffled so I asked a couple of people I trust and one of them — Turner Chief Research Officer Howard Shimmel — had the answer right away: The Sochi Olympics and World Cup in 2014 drove digital video to new heights in those quarters of 2014, making 2015 seem like a decline.
Why is print digital growing at +16% vs. the digital norm of +29% during this period? It looks to be a reverse halo effect of the association with "old media." The prevailing view of advertisers is that they cannot increase adspend in order to take advantage of the newest media; they must for some reason keep the total steady (the usual reason given being the economy and, in CPG, private label). However, 40% of the time a brand is not spending enough money, as proven by over 400 BehaviorScan heavy-up tests.
My feeling is this: If there is ROI evidence that the current creative is working, we are probably not spending enough. So what is needed by media being unfairly punished by an attitude of "MediaAgeism" is to use ROI measurement intelligently to prove that the optimal mix happens to include a lot of tech-oldster media, and that the way to run a business is to not let prejudicial images get in the way of maximizing profit and growth.
Word to the wise: Don't rob Peter to pay Paul. Taking money out of established media to fund the testing of new media does not make logical sense. Test media alone and in combination to find what works in terms of ROI and then test whether and where increased adspend results in higher ROI and growth.
Finally, Pure Play Internet Radio is up +44%, suggesting that CPG advertisers are seeing some good sales results they can attribute to that media type.
The two largest spend categories are (1) Ad Network/Ad Exchange up +31%, and 40.6% of CPG digital dollars, and (2) Pure Play — Content/Search up +27%, and 27.4% of CPG digital dollars.
So the general pattern of more dispersion and less concentration on any one subsector of digital is what we are seeing in CPG — along with an increasing willingness to test outside the box and be ready to activate further based on hard ROI results.
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