Digital advertising is in 'creative destruction' mode

By Chris Pash | 17 September 2019
Getty

Digital advertising can't continue to grow as fast as it has done, says Brian Wieser, Global President of Business Intelligence at GroupM.

The US-based analyst told the AANA's RESET conference that if digital advertising grows as fast in the next five years as it has in the last five it would then be 100% of all advertising. 

"There's almost no evidence to support the idea that digital causes any meaningful change in the overall growth rate of advertising," Wieser told the 500 advertisers at the conference.

Digital advertising is mostly replacing other forms of advertising, a proces of what he called "creative destruction".

"There is a little bit of elevation in the short term because some of these companies do spend a higher percentage of their revenue from advertising," he says.

"But for the most part, it doesn't cause a meaningful change in the trajectory of advertising and therefore it's not realistic to assume that digital as sellers of advertising can become 100% of the industry.

"So it has to slow, it has to decelerate and we have started to see some of that."

On top of that the big digital platforms, Google and Facebook are facing increased regulation from around the world, including in Australia from the inqiuiry by consumer watchdog, the ACCC. 

Forecasts by eMarketer show worldwide digital ad spending rising by 17.6% to $US333.25 billion in 2019. That means that, for the first time, digital will account for roughly half of the global ad market.

In Australia, growth in spending on digital advertising slowed in 2019 to 7.1% compared to 11% in 2018, reflecting a downturn in the overall market.

Trade group Interactive Advertising Bureau (IAB) says total spend by brands and agencies hit $9 billion, up from $8.5 billion in 2018. 

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