I find numbers quite interesting. I’m a self-proclaimed numbers geek for sure. I love tracking curves, paths, projections, charts, previous data and future trends, trying to use all this information to be well ahead of the curve and help predict the future. How am I doing? I’ll let everyone else be the judge of that!
But what I have been tracking for the past three years is the life of digital and social media, along with its traditional counterparts and here is what I see.
Digital media has many versions. For simplicity’s sake I’m going to speak generally and not specifically about any one category of digital media. I’m going to take the same approach with social media, and traditional media. So, I won’t be speaking about only one sector of a media category but categorically speaking instead.
No one can dispute that digital and social media have had a meteoric lift for the past 10 years. Both have seen significant double-digit growth YoY for a decade. Combined social and digital media account for the majority of ad spend. While this has been occurring, traditional media has been decreasing but remains reasonably healthy.
Ten years ago, fortune tellers and digital consultants alike, predicted that social and digital media would be the end of traditional media. That it was only a matter of time and that the time wouldn’t be long. I remember my friend professing that he couldn’t wait until the demise of Comcast! I laughed and asked him if he really thought a media company that large was going to just sit dormant and be dumb enough not to be blazing new trails in other media categories, so they could always remain relevant.
Well, it’s ten years later, Comcast has collected more data on their set-top boxes in the past 5 years than in their entire history. They use it for their first-party internal sales as well as selling it to others as third-party data. They have purchased NBC, opened more sports networks, established their own streaming apps, and gotten into VOD, OTT, CTV, and even digital video. And just like Amazon, Netflix, and Apple, they have realized that to survive “content is king”. So, as they say, “not so fast because the old gal is still alive and kicking”!
Now Comcast is only an example, but the point is clear. Companies in traditional media are well-financed and highly involved in evolving and revolutionizing their area of the industry. So, now you see more DOOH than ever before. You see many local companies turning heavily back to radio because of its local feel. Companies of all kinds have gotten into podcasting, streaming, and programmatic. The lines are getting very blurry. Meta (Facebook) owns Twitter, Google owns YouTube. IHeart owns hundreds of stations and became one of the biggest audio streaming companies. Everyone is divesting so they can survive and grow.
As trends and budgets receive more scrutiny, something else is becoming clear. Digital and social alone are not capable of delivering all the results most companies want or need.
So, even the largest companies like Samsung, Verizon, Apple, Microsoft, Netflix, Meta, Walmart, and Amazon are scaling their digital budgets back and investing heavier once again in the “new and improved traditional media outlets”.
Huh? Yep, while digital spending has not stopped its growth trajectory, it has definitely slowed down considerably. And companies like Google and Meta are now under pressure for the first time in their lives to hit projections and profits.
That’s what happens when it cost more to use these platforms than it once did. It’s also a problem they have self-inflicted by altering their algorithms to deliver less while costing more. And the final problem, is they are so noisy now, that many companies don’t have the stomach to continue increasing their budgets to get over their competitor’s noise!
When a segment is less crowded with competition, you can spend less to have a louder voice and bigger share of that audience, even if the audience size is smaller. Don’t misunderstand my point here. Digital and social are good tools and as AI really becomes clearer to everyone, it will help create the next media revolution. And in the meantime, these two categories (digital and social) will be the benefactor of the majority of media budgets. But it’s definitely slowing and it’s beginning to roll back.
2023 will be the slowest growth year in both social and digital categories in recent years and it will further decrease in 2024. In the meantime, traditional media outlets will stay steady with their traditional media output and continue to increase their quasi-digital footprint.
Digital gurus often shun traditional media because it’s less trackable and for the moment they are correct about that. But don’t be gullible. All digital is not truly trackable to sales unless those sales are derived from a direct digital action tracked from an ad to an online sale. Anything else contains a lot of conjecture or assumptions on digital’s part.
And while we would all love to be able to account for every penny of our media budgets, what some are beginning to realize is that “selling more” and “winning more” are more important to their company’s future success than just being able to tell how many of your digital ads, didn’t work!
Because at the end of every quarter when public companies hold their quarterly meetings and release their actual earnings versus their projected earnings, no shareholder has ever asked how many likes and retweets they got! They just want to know how much growth they expect next quarter!
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