According to PQ Media, marketing technologies like AR, VR, AI and IoT contributed significantly to revenue growth in 2016
PQ Media® has released its 4th Annual Performance Benchmark for the global advertising and marketing industry. The report titled, “Global Advertising & Marketing Revenue Forecast 2016-20” states that the industry revenues grew by 4.9%, touching $1.18 trillion in 2016, accelerating from 3.7% rise registered for the previous year. The report by PQ Media attributes the strong growth in mobile media, Over-the-Top (OTT) video, content marketing and Digital Out-of-Home (DOOH) advertising for the significant growth in marketing and advertising industry. The report has been published as part of PQ Media’s annual Global Media & Technology SeriesTM (GMT Series).
Interestingly, the report warns about expected drop in the growth in 2017, due to the absence of initiatives by the industry leaders in areas like major political and sports-related media spending. The slowdown in online media growth will also affect the revenues considerably for the year. PQ Media, surprisingly, left out the programmatic category from this report while analyzing revenues of the digital media advertising and marketing platforms.
Highlights from PQ Media ‘s GMT Series
Brands are moving at a rampant pace towards developing campaigns that utilize the fastest-growing of the 40 digital and alternative media channels PQ Media tracks, such as smart tech marketing, which is defined, sized and projected for the first time anywhere in the new PQ Media report.
Smart Tech Marketing Grew by 1000% in 2016
Smart tech marketing growth skyrocketed by over 1,000% in 2016, as select brands scrambled to embed messages in the AR game Pokemon Go!; to team up with IBM’s Watson to drive AI campaigns; to develop IoT marketing messages.
Overall Advertising and Marketing Revenues
Global advertising and marketing are projected to rise by 4.4% in 2017, at a CAGR of 5.1% from 2015-2020.
Seven of the 13 mobile media channels PQ Media tracks posted growth rates of faster than 40% in 2016, including mobile coupon marketing, mobile video game advertising, mobile sampling and contests, mobile search and mobile video, as well as emerging smart technology marketing (or “acronym tech”) via the Internet of Things (IoT), artificial intelligence (AI) and augmented reality (AR), among others, according to PQ Media’s Global Advertising & Marketing Revenue Forecast 2016-20.
Digital Media Revenues
Digital & alternative media expanded 12.5% to $399.4 billion, while traditional inched up 1.4% to $783.7 billion. The US remained the largest media market in 2016 at $461.7 billion, while no other market exceeded $100 billion. Four of the top 20 media markets posted double-digit growth in 2016, led by India, as the US ranked 14th with an overall growth of 4.7%.
Additionally, Direct Marketing was the largest of the 15 hybrids (traditional & digital media) silos tracked, with revenues of $230.4 billion worldwide.
Major events in 2016, including the Summer Olympics and Trump presidential campaign’s unusual reliance on earned media coverage, and surging mobile media use worldwide, were offset in the second half of the year by increasingly volatile political climates and continued economic trepidation in the US and abroad.
Political leaders and parties were replaced in several leading global markets (US, UK, Brazil, South Korea), while other incumbents faced increased pressure from opposing parties (France, Japan, Germany, India), and various economic and political issues weighed down other major media economies, including South Africa, China, and Russia.
In addition, several key global markets in early 2017 were expecting to feel the impact of new Trump administration policies, some viewed as positive (Russia, China) and others perceived as negative (Mexico, Taiwan, China). PQ Media indicated that the US and global trends were buoyed by cyclical drivers last year, which may have masked a combination of potentially adverse secular developments that resurfaced in late 2016. Due to these turns in PEST variables, PQ Media said it recalibrated several ad & marketing growth rates for 4Q 2016 and 2017.
PQ Media President Patrick Quinn says, “The primary reason for decelerating growth in online media is that brand marketers are shifting budgets to media platforms and channels that demonstrate the consistent ability to execute on those critical objectives.”
Quinn adds, “Despite this volatile mix, the advertising & marketing industry remains relatively stable due to several key growth drivers, including the need to engage more effectively with on-the-go consumers through experiential and influencer marketing; the shift to omnichannel media campaigns that employ the strengths of both traditional and digital media; and the quick adaptation of new technologies and strategies to engage target consumers for extended periods in the right venue, at the right time and in the ideal mindset.”
The Maturity of Digital Media Advertising and Marketing
While print media advertising has lost almost half its value over the past 20 years, due to the rise of digital media advertising and marketing, PQ Media believes a similar phenomenon has emerged in online media as brands rapidly move investments from the internet to mobile media channels. Several internet channels have begun to post low single-digit, or even negative, growth rates after years of boasting double-digit gains annually, such as e-mail marketing and online search, according to the Global Advertising & Marketing Revenue Forecast 2016-20.
According to Gartner report 2016, Marketing technology spend is now higher than advertising spend for companies, representing 33% of the average marketing budget. Mobile was not the only digital and alternative media to post double-digit growth in 2016. Brands are seeking methods to interactive more efficiently with consumers, particularly as foot traffic at brick-and-mortar retail outlets declines.
OTT video, product placement, content marketing, DOOH media and word-of-mouth marketing have all consistently posted strong gains in recent years. Meanwhile, traditional direct marketing remained the largest of the 21 digital and traditional media platforms PQ Media tracks, surpassing $215 billion in 2016, with three other platforms exceeding $100 million, including live events, terrestrial broadcast television, and traditional promotions.