SQAD POD: 5 Game Changers Every Advertiser Should Know – September 2016

Industry news and insights podcast curated from the world of advertising and marketing trends.

With the end of summer, the weather starts to cool down; but the change in season means the advertising world is starting to heat up. This month we’re taking a closer look at Carat’s annual global forecast for projected advertising spend, how a change of agency by McDonalds may have changed the ad game too; we’ll also dive into how click fraud and bot traffic are reshaping the online advertising landscape, and more.

1. Global Ad Forecast: Digital Grows but TV Still Largest Share

Carat’s Adspend Report for September 2016 is projecting that television ad spend will continue to take the #1 spot but digital is close on its heels and closing the gap. Already in 2016, digital ad spend grew by 15.6%, and is expected to have grown almost 28% by the end of the year. However, advertisers are still leaning on television as an anchor for a predictable return on investment in their media plans. Digging deeper into the numbers shows that 41.1% share of total media spend in 2016 was for linear television, but looking forward, growth projections for 2017 show a modest 2.3% increase.

2. Advertising Fees Rely on You “Lovin’ It”

McDonald’s’ nearly $1 billion advertising business found a new home with DDB Chicago, an Omnicom agency. But the more interesting news is the evolution to their time-tested advertising model. From now on, budgets and compensation will be directly tied to advertising performance. Both McDonald’s and DDB Chicago will agree upon undisclosed indicators that will determine how well an advertising campaign is performing which will in turn determine how much the agency will be compensated. Even without specific details about the measurement metrics, it’s probably safe to assume that the “viral” performance of a campaign will play a big part in its perceived success. If this trend takes hold, it could have major implications for how agencies will invest in talent, long-term opportunities, and ad placements.

Ad Fraud is Burning Through Ad Dollars

Ad fraud continues to top the list of complaints among advertisers and media planners and, according to one study, could cost them as much as $7.2 billion to fight it in 2016. Researchers are scrambling to pinpoint vulnerabilities and identify fraud through web browsers and purchase methods but “Click fraud” and “bot traffic” are becoming increasingly sophisticated. One study recently found that 8.7% of programmatic ads are fraudulent compared to 2.4% of ads sold directly from publishers, representing hundreds of millions in advertising dollars lost to phantom clicks and roving bots.

4. Snapchat: No Longer the New Kid in Social Advertising

Snapchat, the darling of social media, has made a big entrance into the digital advertising arena thanks to 150 million users and one of the youngest audiences demographics. Snapchat Geofilters and Lenses are reportedly bringing $350 million in advertising revenue in 2016. The big draw for advertisers is that these placements still appear to consumers as native content rather than meticulously curated advertising; that’s a big win when trying to attract the eyes of the ad-hating teens and millennials logging millions of hours on Snapchat every day. Reports suggest Snapchat will start to offer paid content between Stories, which will be a major test to see if the platform’s “coolness” factor will be tarnished among its fickle core user base.

5. Buzzfeed and Others Focus on Video Content

Millennials are fast growing into the largest media consumer group after Boomers and video is a hot topic among publishers who are fighting to stay relevant to an audience juggling a seemingly endless supply of entertainment options. For perspective, half of Buzzfeed’s total revenue already comes from video, and they expect that number will rise to 75% by 2018. So it’s no surprise that other millennial-focused sites like Mic are also investing heavily in video production & development as an advertising goldmine. And it’s not just hot new online media sites tapping into video, companies like the New York Times and Tronc are stepping up their video content development and leaning into social distribution of stories among readers.