It Doesn’t Add Up
The advertising business is in a weird place. US digital ad spending will reach $83 billion in 2017, which represents 16% growth over last year. Seems good right? Well, not exactly. Although big advertisers are migrating from traditional platforms like TV and print to digital the shit isn’t spreading evenly across the industry. According to eMarketer, Facebook and Google will account for 103% of all growth in digital ad spending this year, which means the rest of the market is actually shrinking.
This doesn’t mean that all digital properties are dying, there are some winners left. But if you look at the industry as a collective, Facebook and Google are ripping our faces off. It makes some sense too. Digital ads are mostly junk and consumers know it. That’s why over 200 million of us have installed adblocking software onto our browsers. Is there a single person in the world who misses pop up ads?
There is one digital ad format left that has significant upside: mobile. People have their phones with them everywhere and they use their favourite apps many times over the course of the day. This is the kind of access that makes marketers spray their shorts. Counterintuitively, your phone’s small screen ended up being a benefit to advertisers as well because it caused software engineers to get creative when they built the new advertising products. No more crappy banner ads. No, mobile ads appear native to the format. Instagram ads look just like pictures. Facebook ads look just like your friend’s posts. Yaaaaay, 2017 is a hellscape!
Anyway, this letter was a long way of saying you’ll notice mobile ads showing up in your Archive photo stream soon. We know that ads may seem like an annoyance but magazines cost money and we aren’t running a charity here. Somebody’s got to feed the monkey.
I’ll leave you with the words of Scott Galloway, “Brands love young people. Why? Because young people are stupid and they’ll spend a lot of money, irrational money, on brands, which translates to margin, which translates to shareholder value.”