Brands Commit To Increase Online Ad Spend

Two in three of the world's largest advertisers are committed to increased investment in online advertising in 2017-18 -- some by as much as 40%, according to a study conducted by the World Federation of Advertisers and Ebiquity.

The main motivations behind investing in digital advertising are to drive incremental reach (a major role in the decision to invest for 79%) and to increase brand awareness (69%). Despite the increased targeting potential that programmatic can provide, ‘precise targeting’ is a major factor in the decision to invest in digital for just 55%.

Despite the continued commitments to increase spend, the level of skepticism over online advertising remains high. Nearly all (90%) regard viewability as a major concern, 76% regard transparency as a major concern.

More than six in 10 (62%) are ‘dissatisfied’ with the overall level of measurement standards in online advertising, and only 45% clearly seeing the value it adds.

The report finds advertisers are moving into tougher conversations for digital as demonstrated by those who are cutting spend.



The three "priority" metrics for respondents are reach (72%), target audience exposure (66%) and video completion rates (62%). As such, the metrics in use tend to relate more to exposure rather than effectiveness.

"Until recently, advertisers were comparatively reserved about their frustrations with the lack of robust measurement of effectiveness and the absence of independent verification," says Matt Green, global lead, media & digital marketing, WFA. "They’ve now lost their reticence and are demanding more openness and evidence.”

Video is likely to be the major beneficiary with 89% of advertisers intending to invest more in this medium. The reason? Nearly eight in 10 branding/awareness advertisers (79%) say that video delivers a ‘high effect,’ significantly better performance than static display.

To that end, nearly half (46%) plan to cut back on static display in 2017, with more than half saying the format delivers a ‘low effect’. On the other side, ‘premium inventory’ is found to be more effective than non-premium for 62% of respondents.

Ultimately, advertisers are not yet convinced about the effectiveness of digital advertising, but 75% are willing to accept the challenges it presents.

"Online advertising is clearly here and here to stay – it’s the present and the future," says Nick Manning, chief strategy officer of Ebiquity. "But our survey results show that advertisers are not convinced by current measurement standards."

The research was conducted by the WFA and Ebiquity and results are based on responses from more than 50 global advertisers with an annual advertising spend of more than $80 billion.

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