Digital Ads Decline, Print Stabilizes — What Gives?

This week Borrell Associates published a real-estate spending report, which surprisingly projected a 2% decline in digital spending year over year for 2015. The firm was quick to qualify this assessment, saying “this is one of the rare categories that will actually see a decrease in targeted online display revenue by 2019.”

Yet real-estate has always been a leading indicator for other local advertising categories. Realtors have historically been more aggressive and earlier to adopt new marketing strategies and tactics than most of their small business peers.

The report asserts that the real estate category as a whole spends 62% of its collective ad budget on digital, while agents and brokers spend 75%. The report suggests this 75% threshold may be the “saturation point” for digital above which it can go no further. The report also cites anecdotal information to assert there’s a “renewed interest in print” among real-estate advertisers.

Beyond this, new data from LSA indicates that directory references/lookups (combined print and digital) may have stabilized from a consumer-usage standpoint (through traditional revenues continue to decline). Market to market these numbers may be different but in the aggregate an equilibrium may have been reached — this against the backdrop of 75% smartphone penetration.

print and iyp usage

There are many categories where local (and national) marketers have not caught up to consumers or where the ad spend is not in alignment with larger market trends. The mobile market in general is an example. But I find it interesting that, at least in one prominent local media category, digital may have reached a kind of ceiling while print is either showing new life or seems to have stopped its slide.

Yet it may be premature to generalize with confidence. Nonetheless these two data points are very interesting for what they may imply about the future.

Digital media faces ongoing challenges of complexity, fragmentation, “viewability” and, ironically, accountability in many instances. This is especially true for non-search digital spending at the local level. Both consumer behavior and media spending are terribly fragmented. Attribution is very challenging; proving ROI is challenging.

In a few years more vertical categories may look like real estate, where spending rises to some “digital saturation point” and then competing channels fight it out for share (e.g., search vs. social; video vs. conventional display) — while traditional media maintain some core share of ad revenue.

What are your thoughts about these data and whether they suggest anything about the future?

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One Response

  1. Interesting piece, Greg, and nice discussion of the fragmentation of digital display advertising — I especially like the point about accountability. I’ll be curious to see if other industries showcase a digital saturation point like this. Also, I wonder if fatigue in online display spending better positions local search, local listings and social media, which have more direct ties to local customers. Thanks for sharing!

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