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Plus Report - By Thomas Baekdal - November 2015

The Uncertain Future of Advertising

We can probably agree that the current state of digital advertising is a huge mess, and the future of advertising has never been more sketchy. But what is this future? This is what we are going to talk about in this article.

Before we begin, though, there is one thing that we need to talk about.

Over the past several months, the increase of ad blockers, new regulations, and other elements have caused many people to say that advertising is dying. This has been particularly noticeable in my publishing circles. Some people have even gone so far as to say: "In the future there will be no ads."

This, of course, is a silly way to think. Brands still need to get exposure, and they still need to spread the word about their new products and campaigns.

If we look at the US advertising market, for instance, brands are spending a whopping $189 billion per year on advertising, of which about $60 billion goes to digital, and it is expected to rise to $220 billion by 2020. I see no trends short of a new financial crisis that are going to change that.

And it's the same worldwide, as you can see here:

You will notice two things:

First that the overall advertising revenue is increasing. Secondly, that digital's share is slowly gaining ground. I will remind you that non-digital in this context are all the forms of non-digital advertising. They are TV ads, radio ads, newspapers and magazine ads, outdoor ads, and so forth.

If we only look at newspapers versus digital, the picture looks quite a lot scarier:

Again, you will notice that the overall revenue is actually going up.

It doesn't matter how many people use ad blockers or how other factors influence the future of advertising. These changes impact the formats we use, but they don't influence the future revenue potential of the market as a whole.

The future of advertising as an industry is in no trouble at all. The problem is entirely based on how it operates, and what formats of ads that we use. Even if everyone were to use an ad blocker tomorrow, brands would still be looking to spend almost $550 billion on creating reach and exposure for their products.

 
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Thomas Baekdal

Founder, media analyst, author, and publisher. Follow on Twitter

"Thomas Baekdal is one of Scandinavia's most sought-after experts in the digitization of media companies. He has made ​​himself known for his analysis of how digitization has changed the way we consume media."
Swedish business magazine, Resumé

 

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