GroupM, in its latest forecasts for the advertising industry, has made some significant revisions on the definition of, and forecasts for, digital advertising.
Brian Weiser, global president of business intelligence at GroupM, told a briefing: "Digital has become so pervasive, definitions of advertising are becoming increasingly blurry."
When a video clip appears online, is that TV or digital? What do you do with digital out-of-home when it is displayed via the internet -- is that outdoor or digital?
GroupM has attempted to create a common global standard definition.
Weiser: "And the reason we do it that way is because there are many global marketers, and many regional marketers, who want to make sure that they understand the industry in a relatively consistent manner.
"We recognise that there can be different conventions around the world but as a baseline we start by saying that something like YouTube, right now, for the most part, is not television.
"There are some marketers who absolutely think it is and should be compared ... but alongside television, we think that's a minority of the revenues today, and probably will be for some time.
"Consider newspaper podcasts. What do you do with that? Is it print? Is it digital, being comparable to other display ads, or comparable to social media platforms? Or is it like audio?
"Where do you categorise it? Thankfully, these things are relatively small. And they're not that significant in terms of causing us not to sleep at night.
"But it is something that we increasingly think about, when we consider how we're defining media and how we're trying to make it consistent in markets around the world."
GroupM expects growth in ad revenue for pure-play digital platforms of 12% in 2022, slower than the high flying 32% pace in 2021 as the economny came out of the pandemic dip.
"Although typical large brands with well-diversified media plans may allocate half of their budgets into digital media, the average, covering marketers of all types and sizes — including many who are too small to use anything other than digital media -- is much higher at 67% this year."
GroupM, in its mid year forecasts, tackles a re-definition of digital: “The root cause of these changes is the same: Much of the industry has been systemically and perpetually under-estimating the scale and trajectory of digital advertising, including many of that sector’s proponents.
“In our new data we have taken significant steps to correct for these issues as best as we possibly can.”
GroupM argues that over the years many definitions of what is digital advertising have come to be accepted.
These include governmental bodies, which can use the force of law to compel disclosures or have an estimation process based on data they have.
And various trade bodies, media monitoring services and data based on agency billings.
GroupM now estimates that pure play digital advertising revenues outside of China would have amounted to around $US400 billion in 2021, with some extra for other smaller digital platforms around the world.
And that global growth for these digital advertising activities should have approached 40%.
“Unfortunately, if we added up all the numbers produced by conventional underlying sources, we would see lower figures,” says GroupM’s report, This Year Next Year.
“We believe the reasons behind such differences relate to the process underlying sources go through when gathering data.
"In the case of digital advertising, local trade associations — probably the most commonly relied-upon underlying source used in any given market — do not typically get actual data from the world’s largest platforms.
"Instead, they’re left to make their own estimates based on scarce public information. Some of those underlying sources may get actual revenue from large digital platforms within a given market, but we suspect even the country leads for those platforms may not be fully aware of how much revenue flows into their markets from other parts of the world.
"This issue has increased in scale over time as self-service platforms and cross-country media buying have become more common.
"While we have previously made upward adjustments to underlying figures in many individual markets, we made many more of them during this cycle of estimate revisions given the unusual degree of growth the largest industry players exhibited in 2021.
"It remains difficult to identify exactly which individual markets will require further historical adjustments, but we expect to make additional changes as new evidence emerges to better support making those historical modifications."
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