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Wednesday, December 21, 2022

Report: Digital Ad Spending Declined In November


In what appears to be an ad industry first, digital ad spending declined 1% in November, according to Mediapost citing new data from Standard Media Index (SMI).

The analysis, which is derived from SMI's pool of data of actual media buys made by the major agency holding companies and independent media-buying agencies, likely represents the first time digital has declined since it began ascending as a high-growth ad medium in the mid-1990s.

The analysis also is the first from SMI to include new media breaks based on ad formats, and shows that a new break for "digital video" rose 7% in November, helping to offset digital's overall decline in November.

"Digital video really carried stability for digital overall," SMI Director of Advertising Insights Nicole McCurnin said.

The data also shows linear TV ad spending fell 12%, driving the share of U.S. ad spending for the long-dominant medium to 35% vs. 23% for digital video, which includes any digital ad format running on websites, platforms or CTV apps and devices.

Recent analyses from agency holding company forecasters -- most notably GroupM's Business Intelligence team -- have noted a marked "deceleration" in digital ad spending based on third quarter earnings releases of major digital platforms, especially Meta.

During their third quarter earnings call with analysts and investors, Meta executives did single out an underwhelming ad marketplace response to their push to make Facebook and Instagram "Reels" a premium video advertising unit, some observers believe they may have saturated the market with too much supply of video inventory to quickly, especially given its timing with an overall economic downturn.

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