From an industry perspective, content marketing is expected to grow at a considerable 20.30% rate this year, according SmartInsights.com. Big data is expected to grow 20.2% and marketing automation is expected to grow 10.30%.
The Knowledge Engineers, meanwhile, reports that the digital advertising market will reach $184 billion worldwide this year and represent 29% of the global advertising industry. Yet, like any industry, competition and quickly changing standards are creating both winners and losers, so success isn’t guaranteed.
Just recently, Publicis Group SA booked a $1.5 billion write down of its digital business. In announcing the write down, executives said the company’s Sapient unit was unlikely to reach aggressive targets. Publicis had purchased the marketing and consulting unit for $3.7 billion in 2015, which was a 44% premium. But for 2016, the company’s 7% growth rate fell below expectations.
Other industry speed bumps also exist. TheWrap reports that Playboy, which generated attention last year when it announced it would no longer feature pictures of nude women, has laid of its digital Chief Content Officer Corey Jones and other employees from its digital division. The change has reportedly been made as part of making Playboy better resonate with a younger savvier audience and to “reset the workflow between digital and print editorial departments.”
Playboy’s woes, in part, can be attributed to the company struggling to change from a traditional print magazine to a digital publication. That problem, however, doesn’t apply to digital content platform Medium, which has recently laid off a third of its publishing staff. In announcing the layoff, Medium found Ev Williams maintained that digital marketing is a “broken system” that is based on rewarding producers of content that drive web surfers to view advertisements for a few seconds.
The company, he explained, is now working to develop a new model for content producers. Megabrand Proctor and Gamble is also weighing in on digital marketing concerns, reports CMO. Marc Prichard, who is the company’s global brand building executive, recently announced that the company was revamping its agency contracts and embracing standards to fight poor media supply chain practices.
In announcing the changes, he said brands need better media transparency and complained that too many platforms are “grading their own work” or not using third parties to verify engagement data. In addition to the needs for enhanced transparency and third party verification, the industry must struggle with another challenge—simply put, it appears to be becoming a duopoly.
For the third quarter of last year, digital advertising reached $17.6 billion, which was a 20% year-over-year increase, but close to 65% of revenues are expected to have been captured by Google and Facebook, according to estimates by Pivotal Research.
According to Forbes, Digital Content Next has created an even more sobering estimate—Facebook and Google are capturing 90% for new advertising revenues. The impact can be seen with merger and acquisition activity with the number of advertising technology companies that raised money dropping 17% last year. The outlook for the industry, of course, remains bright.
Even as a duopoly demand will existing for innovative companies that can provide technology that will make online experiences more meaningful and help convert web surfers into customers.
