The report discusses the distinct shift of business spending away from traditional online advertising to non-advertising marketing expenses, into the category labeled “promotions.” Spending is being allocated in abundance to a brand’s own advertising channel rather than to traditional advertising.
The message being conveyed in the report to media companies is somewhat gruesome: The deer have the guns. The report contains wake-up calls for media companies trying to use the web to attract a big audience with local news of classified listings and then sell banner ads around it.
Some of the highlights include:
• Online display ads have dwindled in popularity. The belief is that spending on display ads will peak this year at $12.6 billion, and then begin to decline to less than half that amount over the next four years.
• Paid search advertising is likewise facing a luster-loss. The prediction is that it will hit its peak next year at $16.9 billion, followed by a gradual decline.
• Online promotions was an $8 billion category last year. It is expected to nearly triple over the next five years to $22.8 billion, surpassing all other online ad categories.