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Digital To Eclipse Traditional Advertising: Study

Written on
May 5th 2008
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by Kathleen  |
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growth14.jpgADOTAS – Interactive advertising and user-generated content will drive revenues in the digital market for the next five years, an Accenture survey finds.

About 70% of respondents said that while they only derive 10% or less of their revenue from digital advertising and the like, they believe that the revenue they’re garnering is “substantial” and “represents tremendous growth.”

The four main sources of revenue cited by respondents are identical to those identified in last year’s survey, indicating a growing consensus about the potential of the new platforms, Accenture reports.

The findings:

•    Multi-platform distribution. When asked to identify the largest drivers of revenue growth over the next five years, two-thirds (66%) of respondents cited new platforms or new ways of delivering content — significantly more than the number who cited new content types (24%) or new geographies (10%). And nearly two-thirds (63%) of respondents said they will pursue a “multi-screen” distribution strategy, which includes television, online and mobile delivery.

•    Short-form video. When asked which content type will generate the greatest growth, the greatest number of respondents — 38% —cited short-form video, with online portal/publishing second (23%) and video games third (18%).

•    Social media and user-generated content are high-growth opportunities. Two-thirds (68%) of respondents identified social media and user-generated content as a high-growth opportunity, and more than half (56%) said they are already involved in social media in some capacity.

•    Advertising. When asked to identify what they believe will be the number one business model in five years, nearly two-thirds (62%) of respondents selected advertising-supported business models, compared with 25% who cited subscription-based services and 11% who cited pay-per-play services.

•    Digital advertising will drive a large portion of future revenues. Almost every media company is trying to adapt to the reality of digital advertising as a major source of revenue. Fifty-two percent of respondents said they see digital advertising eclipsing traditional advertising within five years, and 62% said they believe that content will be supported by a variety of digital advertising methods, including branded content, search, sponsorships, performance and a mix of all of these within the next five years.

•  Uncertainty as to when the mobile market will take off. When asked when they believe the nascent mobile market will become a mass market, respondents were split, with slightly more than half (55%) saying within three years, while slightly less than half (45%) said they believe it will take longer.

•  There are several barriers to the mobile market. Consumer readiness continues to be singled out as a barrier to the mass uptake of the mobile market, cited by half (51%) of the executives surveyed. Respondents also cited other barriers, including companies’ ability — or lack thereof — to provide a consistent user experience (cited by 42% of respondents), as well as a lack of readiness among both content owners and mobile operators/networks (cited by 37%).

Accenture’s 2008 Global Media Content Survey gathers responses from more than 100 senior execs in the media and entertainment industry in order to analyze their growth strategies in advertising, film, music, publishing, the Internet, videogames and more.



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