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World Cup Confirms Digital Advertising Growth

Digital Advertising Is Here To Stay

The 2014 Men’s World Cup Tournament was highly profitable for FIFA, the international governing body of professional soccer. With major brands clamoring for optimum exposure during the event, even the most seasoned advertisers had to hedge their bets by launching comprehensive multimedia ad buys; a large amount of which was targeted at digital advertising. Although television continues to be the dominant form of media utilized, many, if not most, companies have invested heavily in the digital space through options such as streaming video services, social media and online video.

photo of soccer player from world cup scoring a goal with text reading score with the first letter (S) replaced with a ($) sign to indicate the billions of dollars spent on advertising the eventAccording to its 2014 financial report, the organization generated $4.8 billion during the month-long event, earning a profit of $2.6 billion. The official breakdown shows that FIFA drew $1.6 billion from advertisers. [1]

Before the event, it was estimated that the tournament, which was expected to be the largest event in television history, would increase advertising spending by $1.5 billion worldwide. [2]

Perhaps the most glaring example of this shift was Adidas’ decision to, during its largest-ever marketing campaign, to spend more on digital advertising than more traditional media, like television. [3]

Digital Advertising is Changing the Landscape

The days of families and groups of people all gathering in front of one television set to watch a sporting event are beginning to fade. The American and worldwide audience is more fragmented than ever. Even if a billion people all watch the World Cup, or any major sporting event, there are multiple viewing mediums to account for. Advertisers need to be sure to use as many different avenues as possible to reach their target audience.

The American and worldwide audience is more fragmented than ever.

Choosing just one advertising medium in this day and age may be putting too many eggs in one basket. With more and more people moving away from cable and traditional television, companies need to be mindful about who their demographic is and where/how they are consuming media.

If you’re a big company like Nike, Sony, Gatorade or General Motors, you can afford to blindly spend millions of dollars advertising during big sporting events, purchase massive billboards and take out big magazine ads. If you’re a smaller company with just $10,000 to spend on advertising, you need to be more strategic and make sure every dollar counts.

The Advantages and Disadvantages of Each Advertising Medium

Print Media

As the old joke goes rumors of the demise of traditional print media have been greatly exaggerated. Despite the rapid decline in the sale of newspapers and other print publications, print media is still an excellent way to target a specific niche market. Trade magazines and regional and ethnic newspapers can put your advertisements in front of the people who would most likely take action on them.clip art of man talking into another mans ear telling him that traditional media is not dead yet

Using regional newspaper ads is also effective in that it’s a low-cost way to reach a large group of readers – and people often leave newspapers behind, so you can double-dip on your advertising reach. As far as cost, newspapers generally charge anywhere from $5 – $25 per thousand impressions (CPM). National magazines charge an average of $6 CPM. [4]

Due to the amount of pages and clutter of advertisements in newspapers, it can be easy for your ads to blend in and not stand out from competitors. The vibrant colors of a magazine allow you to be more creative in your message to capture a reader’s imagination. Newspapers are generally limited to a few colors and often a small amount of space, so the message and call to action must be clear and concise.

Radio

According to a 2013 Nielsen report, 90 percent of Americans listen to the radio every week, with the average American radio listener tuning in for over two hours per day. The fact is that even with the explosion of digital products, people still have to commute to and from work every day and will often listen to the radio during those times. [5]

outline of a radio with statistic inside showing 90% of american listen to radio two hours every dayAt a CPM average of just over $4, radio is an extremely low-cost method that also allows many creative ways to get your message out. Selecting different times and different stations will also allow you to better target your demographic. Additionally, because of the varying length of radio spots (10, 15 or 30 seconds) radio allows pricing flexibility that most other mediums do not.

Unfortunately, there’s no completely accurate way to determine the impact of your radio ads. Though many people are listening to the radio daily, how many of them are actively listening to commercials? The fact that radio is not visual also makes it more difficult to capture the audience’s attention, as people are generally doing something else while listening.

Broadcast

Nothing has a greater reach than television. Almost everyone watches some television at some point during the day or week. If you have a product or service to market that is for a general demographic, nothing can beat the potential impact of television advertising. The medium allows for more captivating and memorable storytelling, though a 30-second spot could run you thousands or even millions of dollars. The general cost for television advertising ranges from $10 CPM – $35 CPM.

Some of the most memorable advertising campaigns in history were run through television. Big events like the Super Bowl, March Madness, the World Cup or the Oscar Awards draw tens of millions of viewers –  meaning there is no place where the potential for exposure is greater. silhouette of 2 peole sitting together watching a tv screen with statistic inside showing 70% of U.S. households have a DVR, video on demand, netflx

What ratings and viewership don’t account for is the likelihood of people doing other things during commercial breaks. Unlike the Super Bowl, where watching commercials is a part of the experience, most of the time commercial breaks are time to get snacks and use the restroom. Similar to the issues with radio, how many of the viewers are actively paying attention to a message that is likely costing thousands of dollars?

The creation of more cable channels means that public viewership is fractured and spread across hundreds of channels – this makes it more difficult to reach your target audience unless you advertise across several channels. Also, the advent and increasing popularity of DVRs, video on demand and other services, makes it so viewers can fast forward through or completely avoid commercials. Currently, 70 percent of U.S. households have DVRs, Netflix or use Video on Demand. [6]

Out of Home

silhouetee image of cars driving by billboard with statistic inside showing 20 hours per week american spend travelingThis is the oldest known form of advertising and the only one that does not allow people the option to turn it off or change the channel. Out of home marketing appears on billboards, inside bus shelters, in subways and pretty much every place out of your home. Because of their prominence, these ads are guaranteed to get views, and are actually the overall cheapest form of advertising, in terms of CPM, at a cost of $2.26.

This is an effective strategy for both large companies looking to build brand awareness and small businesses hoping to inform locals of their services and location. Think of how much time we spend outside of our homes on a regular basis – whether it’s going to work, going to school or running errands. The average American spends over 20 hours per week traveling, and nine out of 10 adults have used a car or some form of public transportation within the last month. [7]

One downside to out of home marketing is that it is nearly impossible to target a specific audience – you just have to build it and hope they come. Though everyone commutes at some point, advertisers can’t be sure that their message is reaching the right people. Also, since there is only a limited time that people will see a billboard or some other out of home marketing, advertisers are somewhat limited because they have to keep the message short and memorable.

Digital Advertising

The main advantage that digital advertising gives advertisers is its far easier to measure through metrics like impressions, click-through rates and site traffic. It is often even cheaper than some traditional media, because many publishers charge based on performance, instead of the traditional standard CPM rates. As recently as 2013, U.S. households with high-speed Internet reached an all time high at 73.4 percent. [8]

The main advantage that the digital advertising gives advertisers is that the impact of their strategy can more easily be measured through metrics like impressions, click-through rates and site traffic.

Digital advertising gives companies the ability to make their ads interactive, add videos and allows flexibility to change the message instantly. This strategy also allows customers to make instant purchases through the use of banner advertising, email marketing, social media or search engine marketing to make your business more visible.

If there’s any negative to online advertising, it’s that there’s so much of it everywhere (over $24 billion spent annually) that consumers are becoming more unaware of the ads. Especially with the younger generations many have developed a form of “ad blindness” and simply looking right through ads almost as if they aren’t there to get their desired content (Facebook is the best example of finding users with so-called “ad blindness”). Other worries online users have that might make them much more cautious to click on ads from unknown brands are the increasing cases of viruses, identity theft, and other cyber threats.

The Right Media Mix can Make All The Difference

It’s difficult to get the word out about your business without using digital advertising today, but you want to know that you are getting the most bang for your buck. Mary Pomerantz Advertising has been helping businesses establish their advertising strategy, message and placement for nearly two decades. Allow our award-winning team to work with you on maximizing your advertising dollars. Contact us today at 732-214-9600 to get started.

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