The principal theme of the advertising market over the past few years has been the growth of internet advertising. It accounted for 38% of all expenditure on advertising in 2017, more than any other medium, and up from 16% in 2010. Perhaps unsurprisingly, after such phenomenal success internet advertising is now facing pushback from a number of industry experts who are questioning its value. However, our research shows there has been no retreat in the pace of digital transformation. In contrast, advertisers continue to divert budgets to internet advertising, which we expect to account for 40% of adspend this year, and 45% in 2018.
This is because advertisers have learnt to use internet advertising effectively. In the early years of this decade, many brands were experimenting with internet advertising activities, and as tends to happen with experiments, many of these early campaigns failed. They did not reach the required audiences and change their opinions or behaviours effectively. But as our proprietary research has shown, in 2015 and 2016 brands learned to use internet advertising more effectively, and it is now punching above its weight compared to traditional media. We have also shown how digital marketing in a wider sense is contributing to brand growth, in particular the strength of website traffic and digital content, which we discuss in our summary of advertising expenditure by medium.
Paid advertising is only a part of the story of digital transformation. Advertisers are ramping up their spending on technology, innovation and content, in particular. In this edition we look at examples of each: the changing dynamics of programmatic auctions; start-ups focusing on applying artificial intelligence to marketing; and how NBA stars are using social media to promote their sport, drive the growth of their careers, and create new marketing opportunities for brands.
We also focus on alcohol brands, which face unique challenges to their paid advertising communications. So we examine the opportunities available to them for expanding their owned media activities, and increasing engagement through social media.
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