‘Defensive and disappointing’ would be a fair assessment of the response by Interactive Advertising Bureau (IAB) chair and Native managing director Jarred Cinman to my articles on why I believe media is undergoing an evolutionary, not revolutionary change. I was certainly hoping the IAB would respond because this debate is one that’s central to the media and communication industry’s very existence. In uncertain times, few things are as useful as measured, substantiated debate. My disappointment lies in the almost complete lack of substantiation from Cinman to support his contention that “The Digital Revolution is over. We won”.
Firstly, this isn’t a race, or a fight. ‘Digital’ isn’t just another medium, it has unique components like hyperlinks and social and it has enabled the growth and development of traditional media channels. The one and only morsel offered up by Cinman is a PwC estimate of $100 billion in global digital adspend. I find it somewhat puzzling that the chair of the digital regulatory body of our industry, one that prides itself so profoundly on the precise measurements that digital offers, fails to serve up any data save for one single, un-contextualised number. Not satisfied to leave it there, he accuses me of “Luddite thinking”, of being “dogmatic” and of “doing a disservice to any marketer or business owner who might be paying attention”. Aside from the unnecessary ad hominem, that’s quite a hefty accusation to level, and one that for the sake of quality debate, cannot go unchallenged.
Context and relevance
I have no beef with Cinman, the IAB or digital. In fact I’m a vocal proponent of the appropriate use of digital media and my job involves overseeing an integrated communications offering that includes digital in many of its guises. I’ve been working with online and offline media, telcos, infrastructure players, eTailers and the real online giants for decades. I’m a vocal proponent of the IAB and for the cleaning up of the rogue elements in the industry.
Cinman parries that the Nielsen data I quoted are “outdated measurement technologies”, and in the next breath buttresses this claim with “and hopefully we will have a real piece of research to rely on in these kinds of debates in the future”.
I certainly hope so too. I also argue, with a full awareness of the flaws in Adex, that a longstanding benchmark is immeasurably better than no benchmark at all. This irony appears lost on Cinman as he attempts to sidestep substantiation by making this broadly sweeping and derogatory statement: “But we don’t require this information to characterise McCarthy’s piece as an irrelevant contribution to the debate about media and advertising”. Cinman completely fails to qualify how my argument is irrelevant, making me wonder just how much substance there is to his irascible fustian
Unlike Cinman, I substantiated my position in a piece he elected to ignore, so I shall do so again only this time using the IAB’s own preferred data source, PwC. Before I do so it’s appropriate to reiterate the substance of this debate: my contention is that the advancement of digital media is evolutionary rather than revolutionary. It’s not whether or not digital is relevant. It’s not whether or not a TVC is a better solution than an online campaign. To resort to such simplistic arguments is juvenile, and serves no purpose beyond egotistical bluster.
The PwC data is global, based on available information from 50 countries. It also projects future data on a five year scale off the 2012 base. (Source: PwC Global Entertainment and Media Outlook 2013- 2017). Assuming that the data is reasonably accurate, the global advertising pie was measured at almost US$470 billion in 2012 (this figure includes all digital, television, radio, newspapers, consumer magazines and outdoor only; it excludes trade magazines, cinema and other small channels). I contend that it would have been appropriate to at least quote this number in relation to the $100 billion digital figure, for context. Then at least readers could have quickly determined that all digital channels amount to about 21% of global adspend, but perhaps that was an intentional oversight. Perhaps context didn’t suit the author’s intentions. Perhaps quoting hard data like real numbers didn’t suit his intentions.
Defining the issue: commercial and non-commercial advertising
Once again I dispute the inclusion of every single item of digital branded content as advertising spend. I previously argued that to include every byte of digital would for comparative purposes require an inclusion of a measure of every piece of branding in the offline world – such as signage, POS, uniforms, vehicles, packaging, etcetera. Cinman ignored that argument altogether, perhaps, again, conveniently. Nobody save for Google knows what percentage of search advertising comes from brands as opposed to individuals and micro businesses, but that matters not. Search is the digital equivalent of directional and landmark signage. Similarly, to include classifieds as adspend is nonsense, simply because it’s not branded messaging. I argue the same for print as for online classified. Cinman argues that the debate is about the definition of a revolution, which I dispute as well.
The issue here is commercial advertising, which involves a brand purchasing access to an audience delivered by a media owner with the purpose of persuading that audience to pay attention to a brand’s message. Simply put, it involves a minimum of two parties, they being the brand owner and the media owner, with various middle-men in the form of creative and media agents in between. Search and classifieds are classic examples of non-commercial advertising – while usually involving a commercial transaction, they lack the persuasion componentry and are restricted to connecting buyers and sellers. For a buyer to trust a seller, there has to be an element of trust which is most often garnered from word of mouth, brand reputation and commercial advertising. Without at least some brand equity, the transaction rate is very likely to be low.
Evaluating the numbers
I have constructed the following charts using only the data from the PwC report. Chart 1 shows the digital spend in its entirety, including search, display, classified, mobile and video. This also includes social spend, although it’s not reported separately.
Chart 2 shows digital spend excluding search and classified, and suddenly a very different picture emerges. Instead of $100bn in 2012, the digital category is now a much less imposing but much more meaningful and realistic $42 billion – at 10.4% of total spend and larger only than OOH (outdoor). The exponential future growth of digital is similarly tempered when extrapolated. Instead of growing to 29.6% share by 2017, digital is expected to grow to 16.9%. This is by far a more realistic picture of the growth of digital media – from zero to 17% in 25 years is decidedly evolutionary. It’s still a hugely impressive performance, but it isn’t this riotous wrecking ball that some would have us believe.
The growth of digital is stronger than all other primary channels, as one would expect in an era of digitisation. However it is interesting to note that the PwC forecasts for the so-called ‘traditional’ media are very much in line with Nielsen’s.
Chart 3 shows the growth of television at a curve
equalling that of digital (albeit off a much larger base). Surprising? Not to me it isn’t. We humans are creatures of habit and we like our lean back media, even if we’re multi-tasking on social platforms. Now look at newspapers. Funny that, it doesn’t plummet off the charts. Nor do consumer magazines. Both media, considered by some to be dead and buried, remain very stable. And both radio and outdoor show meaningful growth. So much for “the revolution’s over, we won”.
Online TV: “Online TV advertising revenues will treble from 2012 to 2017 but will remain a fraction of traditional TV revenues.”
Newspapers: “Globally, continued expansion in growth markets will offset the longer-term declines in mature markets. A number of developing markets across the globe will see significant growth in newspaper revenues. Although revenues overall have declined over the past few years, appetite for newspapers is growing: more than 547 million newspapers were being distributed daily at the end of 2012, up from 516 million in 2008. With growth in Asia Pacific markets particularly, that number is forecast to rise to 594 million per day by 2017.”
Perhaps Chart 4 is the most telling of all in support of my argument. It shows the percentage split of newspaper revenues between paper based advertising and digital advertising, comparing 2012 actuals to projections to 2017. That newspapers will still only garner 11% of their total ad revenue from online display advertising in 2017 is yet another plain piece of evidence of the distinct absence of a revolution.
Anyone who’s been around the industry long enough will readily recall the countless beratings of such blunt and imprecise traditional media measures as brand recall. They were pilloried by the puritanical digital brigade who promise precision metrics by behavioural measure. Strange that the chair of the IAB is now promoting the old school methodologies in favour of the holy grail while admonishing my articles as “an irrelevant contribution to the debate about media and advertising”. With apologies to an old bank advertising slogan, makes you think, doesn’t it?