Why digital ad spending reduced in 2016

By Margaret.

Digital ad spending has been booming over the last few years (2012-2015) with advertisers pouring massive amounts of cash into social, video and search ads to keep up with the changing consumer behaviour. As such, marketers have tapered off investments in traditional forms of advertising e.g. television to offset the increased spend in digital ads. The trend, however, changed towards the end of 2016 as brands shifted to TV ads from digital advertising while messaging apps like Snapchat surpassed Pinterest. Only sectors that sell alcohol beverages, food and dairy products, movies and prescription drugs increased their digital spend.

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How snapchat attracted more users than pinterest

Over the past few years, Pinterest has stood out as the best content sharing firm. With over 100 million active users, it continues to experience a rapid growth trajectory. However, despite the impressive size of Pinterest’s community, the firm has not had much growth over the year 2016. In fact, Snapchat’s figures for daily users hit 110 million in December, surpassing Pinterest for the first time. eMarkerters forecast a surge in Snapchat’s users by 26.9 million users over the next four years.

What made Snapchat stand out from its rival mobile messaging apps in 2016 was the use of brief messages, great visual interfaces and features that allowed users to add creative tags to their posts. For example, Snapchat’s Lens function lets users take selfies that spew rainbows or change into characters from various movies personalities. Additionally, the app seems to target the fastest-growing age group- adults aged 18-24.

Why TV ads increased in Q4 of 2016

While a lot of marketers have shifted to digital ads, the last quarter of 2016 saw big categories of advertisers move back to TV ads. It is because, being an election year, candidates are inclined to invest heavily in TV advertising. For starters, TV ads are a time-honored ritual for elections. Candidates argue that TV advertising and marketing reaches a huge audience than any other form of advertising. And for those who want to announce their candidature, TV ads becomes an essential part of campaigning.

As such, rivals benefit more from the ads than the officeholders because the ads give a candidate a bonus for only making their names known. It explains the surge in TV ads over the last quarter of 2016. What’s more, candidates only care about what it takes to win one or a few more voters to their side regardless of the costs. Campaign consultants are also rewarded for pushing ads, thus make tremendous efforts to get a cut for media spending. However, the big question is whether the trend will spill over to the next year-2017. Since general elections and campaigns roll for a few months, TV ads are likely to revert to their current rates. Once the candidates have settled back in their offices, TV ads are likely to taper off.

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Published
Jan 29, 2017