Time spent with online media will overtake time spent with linear TV for the first time, globally, in 2018. That’s the prediction from WPP’s GroupM, as laid out in its just-released “State of Digital” report.
Online will have a 38% share, TV 37% and the balance will be spread primarily across print and radio.
This year, consumers will spend an average 9.73 hours with media, up from 9.68 hours in 2017 (figures weighted by media investment), per the GroupM forecast.
As you would imagine, more time spent online supports ongoing ecommerce escalation. Thirty-five countries supplied 2017 ecommerce data to GroupM revealing cumulative transactions worth $2.105 trillion, growth of 17% over the prior year.
GroupM predicts 15% growth in 2018 to $2.442 trillion or about 10% of all retail. That’s right, while it sometimes seems as if Amazon.com has come to dominate the world of commerce, some 90% of all goods will still be purchased in brick-and-mortar shops or via their own digital channels.
And that’s not a bad thing, per the report: “Manufacturers remain a layer removed from customer-level data. ‘Wholesale’ relationships may frustrate manufacturers’ goals around data acquisition and the application of knowledge, but they remain logistically efficient and economically preferable to a world vacuumed up by Amazon and Alibaba.”
Programmatic continues to grow sharply. On average, 44% of online display investment was transacted programmatically in 2017 versus 31% in 2016. This will rise to 47% in 2018. For online video investment, programmatic is smaller; 22% in 2017 versus 17% in 2016 and predicted to rise to 24% this year.
As the report notes, brand and consumer safety and privacy issues dominated the narrative around major digital platforms last year and the first part of 2018. “In the aggregate, it’s fair to say that the year saw a substantial net reduction in the dewy-eyed admiration of the new,” the report states, predicting that it will take “all of 2018 for the smoke to clear.”
In light of transparency concerns and the evolving distribution landscape, brands talked a great deal last year about “re-taking control” of much of the media work currently done by agencies and other third parties. The report cites four emerging models, including a “trust-but-verify” agency-client relationship based on “contractually clear partnerships.” Essentially the status quo, but with better written contracts.
An alternative, per the report: Advertisers taking direct control over all third-party ad-tech and mar-tech contracts, but outsourcing most or all of the operations to agencies.
A third model has advertisers employing some in-house specialists to operate ad-tech systems for programmatic buying in cases where clients have advanced in-house search capabilities.
Full in-housing of digital media services is also on the rise, primarily among “digitally native” companies.
What GroupM doesn’t see trending is full in-housing of all media services.
“If Amazon has no appetite for it, who does?” the report states. Obviously, that’s a self-serving view of the future, but not necessarily an inaccurate one. Full in-housing of everything would cost a bundle, but I suppose some client procurement wonks are busy crunching the numbers as I write to see if such a move makes sense. My guess is it won’t for a lot of marketers who have their hands full doing what they currently do.
The 52-page report addresses a number of other issues like blockchain, AI, data, metrics and viewability. It’s definitely worth a read and it can be accessed here.