SMI: Where is Digital Advertising’s Growth Coming From?

In a bid to shed some light on whatamp8217s behind the growth we looked closely at the flow of advertising dollars across the media landscape through the first nine months of the broadcast season October amp821614 amp8211 June amp821615amp160compared to the same time period last yearThe SMI team went to work crunching the numbers and applying data science to the highlyaccurate data at our fingertips ultimately determining that digital ad spend was up about 3 billion yearoveryearItamp8217s important to note that SMI captures actual ad spend directly from the booking systems of six of the largest media buying groups in the US close to but not 100 of the market so we extrapolated our data to provide a fullmarket picture of what is going on across the advertising ecosystemAnalysis ResultsWith the research results in our report showed that organic growth for digital totaled 1 billion and affirmed that it was siphoning share away from other media with the bulk of it coming from televisionThe question of what is driving the growth of digital advertising can be looked at through various lenses On one hand the analysis allows us to understand how much of this digital growth comes as a result of declining spend on other media platforms versus new organic growth See more in the chart belowThe other lens looks at what areas of digital are growing faster than othersamp160 This second piece is closely tied to the work we do directly with media clients to help them understand the types of sites and ad networks that are really performing wellSMIamp8217s analysis fueled some debate when it was released because it showed that just over a billion dollars were quotleavingquotamp160national TV and flowing directly into digitalamp160 An important factor to note when looking at the data is that 2014 was a big year for special sporting events which attracted big ad dollars such as the Sochi Olympics and 2014 Soccer World Cupamp160amp160Ad Ageamp160put it perfectly when accounting for these events in a recent articleWhile the shift to digital accounts for a portion of the 8 annual decline in broadcast spend endogenous factors ratings declines a weak fall scatter market tricky yeartoyear comps played a role as well For example NBC39s coverage of the 2014 Winter Olympics generated 11 billion in ad revenue while ESPN39s stewardship of the FIFA World Cup netted 529 million in salesBig Sporting EventsSince we published our initial analysis we have taken some steps to estimate the impact of those major sporting events While it is difficult to gauge the true effect of these events across media platforms and then remove them for the purposes of an analysis like this we can estimate in very broad strokes that the national TV market was much closer to flat on a yearoveryear basis when removing the estimated ad spend that came specifically from the Olympics and World CupOne thing we are confident of is that these new fullmarket figures are the most accurate estimates of the true impact that digital media is having on the evolving ad sector since we are looking at the actual booking data from major agenciesAnd the other thing we know for sure is that digital is up bigamp160and it continues to grow in any yearonyear analysis that we conductamp160 The only question that is up for debate is how much of this growth is being quotstolenquotamp160from other media or is truly organicamp160 It all depends on how you look at itThe opinions and points of view expressed in this commentary are exclusively the views of the author and do not necessarily represent the views of MediaVillagecomMyersBizNet Inc management or associated bloggers

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SMI: Where is Digital Advertising’s Growth Coming From?

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James Fennessy

"About That with Carl Mayer:" Alaina Donnellon (Episode 6) - By Carl Mayer

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SMI: Where is Digital Advertising’s Growth Coming From?

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James Fennessy

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