What’s On

Digital’s share of media spends to grow 14.4% in 2016: GroupM

  • Programmatic on the rise
  • Integrity of digital supply matters
  • Increase in app usage
  • TV consumption is increasingly non-linear

Fraud, viewability, ad blocking and measurement are the biggest issues for the advertising investments in digital media globally. This was highlighted in GroupM’s Interaction report which also predicted that digital advertising will comprise 31 per cent of measured advertising investment in media in 2016. This figure is up from 28 per cent in 2015 and represents a 14.4 per cent increase to surpass 160 billion USD.

The investments are aimed at reaching nearly 2.3 billion adults expected to use the Internet in the year, and increasingly executed programmatically. In 2015, 37 per cent of display ad investment was transacted programmatically, up from 21 per cent in 2014.

Some correspondents reported a lack of hard facts on the state of adblocking, but 19 countries reported figures on the percentage of users with adblocking technology installed on their devices. Countries with the highest percentage of consumers using adblocking tech included France, Poland and Austria – each reporting greater than 30 per cent of users.

“The rise in consumer adoption of adblocking technology violates the inferred consumer contract with content owners which enables advertising investment to support content development. For this reason, and its potential to inhibit brands’ ability to reach their audiences, it merits close study and preventative measures,” said Adam Smith, Futures Director.

“We have much farther to go in understanding the true impact of adblocking as estimates of lost inventory are scarce. We will be tracking closely the progress of initiatives like the IAB’s LEAN program in the U.S. which encourages publishers to develop light, encrypted, ad choices-supported, and non-invasive advertising strategies to reduce page latency and other nuisances that may encourage the adoption of blockers,” Mr Smith added.

The integrity of digital supply remains a concern for the industry and impression and non-impression-based ad fraud risk varies by market. GroupM recommends working with trusted partners, use of pre-bid controls in unknown markets, development of specific contracts and reliance on verification tools and vendors.

App usage is on the rise as a majority of smartphone users have between 30 to 50 apps installed, and this rise of app usage is a challenge for advertisers. Emerging, more interactive, app-native ad formats hold promise.

The report also highlighted that globally, e-commerce is expected to reach 1.81 trillion USD this year (8 per cent of global retail), up from 1.57 trillion in 2015. E-commerce strategies enabling transactions anywhere and anytime are on the rise and will become the norm.

TV consumption is increasingly non-linear, the report found, particularly with younger audiences. However, correspondents reported comparatively minor shifts in investment due to a prevalent lack of understanding about non-traditional formats and lack of standardised audience measurement around digital video. Next year, we expect that live streaming of video on Facebook and other platforms will be a significant topic in Interaction.

Correspondents also reported that the accessibility, the collection and the application of data from owned and third-party sources remains an imperative and a challenge for many clients.

“We are not now, nor have we ever been, in ‘steady state’ with digital advertising. The velocity of change makes for a dizzying environment for marketers, but we’ve identified what we believe to be enduring truths,” said Rob Norman, Chief Digital Officer.

“Data and technology have changed advertising for the better, even in video. But ads stop working when they’re avoided and when the ecosystem allows fraud, or when strategies don’t follow the consumer to apps and commerce anywhere. Though there is more still to understand about ad avoidance trends, data does suggest the time is now to share in a profound sense of responsibility, transparency and vigilance to ensure the ongoing engagement of consumers with brand communications,” Mr Norman added.

Shubhi Tandon

Shubhi Tandon is the Assistant Editor at Digital Market Asia. Fascinated by the evolving digital media industry, she has focussed on tracking developments in the Asia Pacific market since 2014.