Marketers are continuing to shift budgets from below-the-line, bottom-funnel promotion to above-the-line, traditionally top-of-funnel advertising, driving down promotional spend from $375.3 billion in 2019 to a projected $306.9 billion in 2025, an 18.2% decline. On the surface, this appears to be good news for the ad community, but the shift is being driven by two dynamics that are not positive.
- First, digital media, led by Google, Facebook, Amazon and a handful of sites, offer a more efficient alternative to legacy direct mail and free-standing newspaper inserts for coupons and promotional tools.
- Second, the explosion of digital budgets in the past decade has pushed media buying further away from marketing and closer to procurement teams, whose primary responsibility is cost efficiency.
Media advertising, and the agencies that manage it, have become a friendly haven for efficiency-driven corporate cost-cutting. Corporate programmatic in-housing also offers marketers greater control over media, technology, and human costs, accelerating a shift to impressions-based automated transactions. Media revenue growth will continue to be driven by downward cost-per-thousand pressure as media buying becomes more data-driven, impressions focused, and digitally centric.
Appered first in MediaVillage