Over the past decade, digital marketing technologies and associated ecosystems have dominated the increase in marketing spending.
As consumers have changed their focus from fixed to mobile media, traditional advertising has lost part of its attraction. In response, advertisers shifted spending away from television, radio, newspapers, events, and outdoor advertising into digital media, such as TikTok and TechTarget.
Since the start of the century, marketers have shifted their focus. Repeatedly anticipated that their expenditure on traditional advertising would fall. Conventional advertising spending decreased by -1.4% annually between February 2012 and 2022. Still, total marketing budgets increased by 7.8% annually over the same period.
Recent data indicate, however, that a change is occurring. In contrast to the historical pattern, marketers expected conventional advertising spending to climb by 1.4% and 2.9% in August 2021 and February 2022, respectively.
B2C service organizations foresee the highest growth in conventional advertising spending (+10.2%), followed by B2C product companies (+4.9%) at the forefront of the transformation. Further, and rather strangely, firms that generate one hundred percent of their sales through the Internet are at the forefront of this shift, projecting an 11.7% increase in conventional advertising spending over the next 12 months.
Therefore, why is conventional advertising increasing, and will this trend continue? Seven drivers are visible behind the shift.
Cutting through the digital noise
As consumers spend the majority of their waking hours online, it would appear that they are growing increasingly immune to traditional digital marketing and interaction. Digital marketing clutter that inhibits customers from reading an article, viewing a video, or navigating a website causes them aggravation and a negative relationship with the company. For instance, a HubSpot poll revealed that 57% of respondents despised advertisements that played before a video, and 43% didn’t even view them. Consequently, digital marketers are attempting to find a means to get through the noise.
Rebalancing expenditure away from digital clutter makes sound economic sense. According to More than half of customers frequently or consistently view traditional television commercials and print adverts they receive in the mail from businesses they like. Conversely, traditional advertisements are witnessing higher engagement. Conventional media channels, led by television, radio, and print, exceed digital channels in terms of reach, attention, and engagement compared to prices. This performance disparity is exacerbated by the fact that internet advertising prices have grown, mainly when impression, click, and conversion fraud are accounted for, while the costs of conventional media have decreased.
Utilizing customers’ faith in conventional advertising
The top five most trusted advertising forms are all conventional, with customers placing the highest faith in print advertising (82%), television advertising (80%), direct mail advertising (76%), and radio advertising (71%). Similarly, it was discovered that British and American customers had a higher level of confidence in conventional advertising such as television, radio, and print than in social media advertising. Thus, marketers may utilize traditional advertising to develop brand reputation and confidence among cynical consumers.
Prepare for the extinction of third-party cookies
For years, marketers have depended on third-party cookies to monitor website users, collecting specific information about their search choices to enhance the user experience and target customers with individualized ad experiences. With Google phasing out third-party cookies from Chrome browsers by the end of 2023 and Apple adopting modifications to its iOS14 operating system, the demise of third-party cookies seems nigh. As a result, 19.8% of organizations spend more on traditional advertising (outside of internet strategies), according to the CMO Survey.
Due to this inevitable shift in the advertising environment, marketers will be compelled to employ segmentation techniques that adhere more closely to traditional advertising models. Without sophisticated data-driven targeting, marketers will have to rededicate themselves to expand their reach.
Utilizing the effectiveness of podcasts
Podcasts are a digital media format. Unlike banners, displays, and other social adverts that frequently show during customers’ normal surfing, podcasts employ an on-demand strategy akin to conventional radio. This is one reason advertising is effective. Podcasts had a 51% rise in available inventory, a 53% increase in new podcasts, and an 81% increase in podcast ad impressions.
In addition to reaching over 100 million listeners each month, podcast advertisements are successful because listeners respect their podcast presenters and are persuaded by their endorsements. 45% of podcast listeners think their favorite podcast hosts truly utilize the goods advertised on their programs. Over half of podcast listeners pay greater attention to podcast commercials than advertisements in any other medium. Given the compatibility between target demographic and podcast content, podcasting has shown to be a successful method for putting a company’s brand in front of a targeted and attentive audience.
We are utilizing the digital enhancements of conventional media
Digital technology can utilize traditional methods in surprising and potent ways. Who would have believed, for instance, that direct mail would be revived? This occurred when mailers were linked with a QR code that customers could scan for extra information. Moreover, unique URLs and QR codes enable marketers to collect incredibly granular data, enabling the development of sophisticated marketing analytics on ROI and attribution and diminishing the competitive edge of digital channels.
Fine-tuning brand and market fit
Marketing is both an art and a science-based on circumstances and context. This implies that traditional advertising is occasionally an ideal fit for some businesses, markets, and messages. The “Welcome Back” ad for Guinness, which commemorated the reopening of pubs and restaurants following the Covid-19 shutdown, is a prime example of how broadcast TV provides an excellent venue for emotive story-based advertisements. New addressable TV solutions, such as those offered by Finecast, now enable marketers to precisely target audience segments across on-demand and live-streamed TV, weakening the targeting advantage of internet channels.
Reconsidering digital effectiveness
54.8% of marketers monitor digital marketing effectiveness in real-time, while 35.2% do so quarterly or monthly. At the same time, marketers are developing skepticism over the touted returns of digital media due to the platforms’ control over advertising inventory and measurement of its efficacy. This has prompted issues over ad fraud’s trustworthiness and the possibility that digital advertising is significantly less successful than stated.
Also scrutinized is the digital promise of hyper-targeting and personalization. Recent academic research conducted by Jing Li and colleagues and published in the Journal of Marketing demonstrates, for instance, that retargeting might backfire if implemented too soon. In addition, computer science research has shown that personalization can result in customer resistance, mainly when the consumer is unfamiliar with the brand. In summary, marketers are finding that the benefits of digital media may be a double-edged sword and are thus using it with greater caution.
Long ago, analysts foretold the collapse of conventional advertising. However, it is thriving and poised for expansion for the first time in a decade. When combined, traditional and digital marketing may reach larger audiences, establish and maintain trust, and encourage consumers who might otherwise ignore marketing communications to make purchases.
Oregon Advertising specializes in Digital Marketing. Contact us today to discuss how our digital marketing can help you business.