The need for SMEs to invest in digital advertising technologies
Increasing adoption of & investment by SMEs in digital advertising technologies (“AdTech”) would ensure a democratic playing space in the futureBy Andrew Stott 20 Mar, 2014
“I know that half of my advertising dollars are wasted … I just don’t know which half.” ~ attributed to John Wanamaker, father of the modern department store and advertising
Unlike more traditional advertising spend, digital advertising remains open and fragmented representing opportunities for smaller businesses and brands. The increasing adoption of and investment by SMEs in digital advertising technologies (“AdTech”) would go towards ensuring a democratic playing space at least for the foreseeable future.
Digital advertising has had its share of eye-catching headlines in 2013/14. First, digital advertising spend is growing at double-digit rates. Just two years ago, Facebook derived no revenue from digital ad sales. In 2013, it took 9% of all advertising dollars spent in the US. In 2014, Facebook is poised to take a 16% share. Second, mobile ad spend is leading the way and looks likely to overtake desktop digital advertising spend by 2017.
This “Mobile First” world heralds greater use of native advertising as well as “blended advertising” i.e. a convergence of paid, earned and owned media as consumers and customers demand content on-the-go and away from larger formats such as television, print and desktops. At the same time, some consumers are pushing back against too clever attempts to disguise advertorials and sponsored content. Concurrently, a Mobile First world requires that digital advertising works across devices and platforms and even intra-device (from browser to app).
There is thus an even greater need for companies to operate a multichannel / omnichannel approach and in real-time whether in terms of marketing, analytics and / or interaction with the end-users themselves. Digital advertising today therefore places ever higher demands on content strategy and smart spending as enterprises strive for eyeballs and brand recognition in an ever more crowded space.
The AdTech space is remarkably rich with both depth and breadth involving publisher advertising serving, agency advertising serving, search marketing, web analytics and demand-side platforms (DSPs). These target everyone from publishers to advertising agencies to companies, from buyers to sellers and even across advertising platforms. Critically, AdTech provides measurements and quantification as it seeks to eradicate inefficiencies in advertising spend and make it easier for companies to get content out.
Concurrently, we are likely to see further consolidation of advertising agency companies following the proposed merger of advertising agencies Publicis and Omnicom into the new number one behemoth. Worthy of note is that one of the stated reasons behind the merger was to compete at the negotiations table with digital media giants like Google and Amazon. The merger would consolidate the position of the Big 4 in the advertising agency world (Publicis Omnicom, WPP, Interpublic and Dentsu).
AdTech is a force multiplier and companies, especially SMEs on a budget, should be making appropriate investments now in order to strengthen their brands and avoid being drowned out in the sea of online content. Given the increasingly obvious benefits of digital advertising for SMEs and the low base from which SMEs had been starting from, we expect a transition from the exploratory take-up phase to real investments and developments in the SME sphere.
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