Traditional vs Digital Marketing: Where to Spend Your Budget?

Traditional vs. Digital Marketing: Evolution of Digital Content

Marketing has been inside our homes forever, being part of our family lives in our TVs and living rooms every night, but things have changed drastically in the last decade; marketing has been moved to our pockets. Changes in content consumption affect companies’ budgets and drive marketing decisions toward a dispute between traditional vs. digital marketing.

Traditional vs digital marketing has become a hard decision when you need to reach a high volume of consumers quickly. Although we’ve seen a significant increase in digital channel consumption and growth in the digital marketing budgets, the capabilities to scale up are still lower than the traditional channel.

Why is digital marketing evolving so fast, and how long do companies still invest in traditional channels?

This article will show you some reasons for that change and some market figures to help you and your company’s future marketing budget decisions.

The Digital Move

With the speed with which users consume digital content on the Internet, big brands have taken digital marketing exceptionally seriously. The same goes for the new business and the already established ones.

Even if your business has created room for itself, you must retain the consumer base, which requires you to keep your marketing spend efficiently.

Impact of Digital Content on Traditional TV’s Future

The radio primarily drove in-home entertainment with families huddled around, listening to their favorite programs until television. From that point on, visual storytelling has dominated.

The big players in distributing this television content were the extensive broadcast networks. The three-letter channels that almost everyone is familiar with.

The medium evolved drastically over the years, but most cable companies added more channels, and manufacturers made larger yet thinner TVs.

Television programming goes far beyond the physical television to exist anywhere there’s an Internet connection. Even the biggest and oldest channels have been adapting rapidly to prevent this avid digital consumer’s being forgotten.

Untethering from Physical Television: Traditional vs Digital Marketing

“I was watching TV” used to mean something different than it does now.

What once described sitting in front of a square box in the home can now mean many things. You could have been streaming a show on your cell phone, waiting for your doctor’s appointment.

Television happens everywhere. You could have been binging a Netflix show on your phone. Or, you could have been sitting in front of a square box—but you were watching Hulu through your Apple TV, Roku, or video game console.

The prevalence of high-speed internet allows video content streaming without interruption and endless buffering. This adds a significant point to resolving the battle of traditional vs digital marketing.

Smartphones and tablets have become powerful enough to be portable entertainment systems. Flexible on-demand platforms give audiences more chances to catch their favorite shows.

Technology has provided the foundation for television content to spread. A TV isn’t a physical box—it’s the content that was once trapped inside it.

The End of Broadcast Networks and Cable?

Traditional television is time-dependent, location-dependent, and typically more expensive than third-party digital alternatives. How could traditional TV hope to survive the cheap, premium, on-demand options available?

For every article written about cord-cutting and escaping cable bills, many people still watch traditional television—about 36 hours a week of it.

Cable shows are yet to reach millions. Live event-based programming like the NFL and award shows are still huge draws. Audiences care about the content of their favorite shows.

If traditional television can continue to produce quality programming, there will continue to be an audience. That’s not to say it will be a secure future for cable companies.

The younger generations are growing up in an on-demand environment, where you can binge shows for a low monthly fee. They won’t want to pay $100 for a cable package.

Digital media stands in the winning position in the traditional vs. digital marketing battle. Although it seems that conventional television will survive, the distribution structure will need to be shaken up to compete.

Why does it matter that digital consumption is increasing?

Television’s primary monetization structure is advertising with the famous thirty-second commercials, which break up the action and bother the viewers. Of course, it’s a lot harder to follow the same monetization structure with digital content. The public doesn’t like to watch advertisements.

It’s expensive to produce television advertising. It’s particularly costly due to high competition forcing higher quality standards, and this is one reason why digital media is winning in the battle against traditional media. The future could be in native advertising, product placement, or something the industry hasn’t even come up with yet.

Technology will keep making video content more and more accessible — great news for the viewing public and a tough challenge for marketers looking to reach those viewers.

The Evolution of Digital Marketing and The Reason For Its Growth

Since its inception, digital marketing has always been about finding an edge to reach the right audience. It’s a fast-moving industry with new platforms arriving seemingly every day and bringing new strategic possibilities along with them.

The competitive edge in digital marketing often comes from having a forward-thinking marketer who can stay on top of trends and provide context to new platforms, channels, and tactics. Increasingly though, that edge can be achieved through inhuman means—marketing automation.

1) The Advance of Technology for Buying and Selling

One of the emerging automation techniques is programmatic marketing. Many intricate pieces make up programmatic marketing, but it boils down to using data, algorithms, and machine learning to optimize digital advertising.

If that’s still confusing, you can check how Smart Insights pros define the programmatic process.

Let’s jump into how programmatic is helping to move digital marketing forward with the definition out of the way.

2) Digital Marketing Allows for Precise Target

Traditionally, marketers were able to target very broadly.

Television ads are shown to whoever is watching; the marketer selects a TV show whose audience lines up the closest to their customers. Radio is the same way.

Then, with the vast amounts of data Google and social media networks have, you could begin to target even further. Want to send an ad to every woman over 40 who lives in Nebraska? No problem.

That approach has limitations because not all women in Nebraska have the same characteristics and buyer’s intent. The dynamic nature of programmatic marketing allows you to bid on ads to be shown to specific users—in real-time.

Not a specific set of users but an actual individual. Knowing your audience is genuinely allows you to target them more efficiently and effectively.

3) It’s Data-Driven

We’re well into the era of big data. There’s no shortage of data. There is a shortage of time to analyze that data for patterns to inspire strategy.

The real-time bidding nature of digital marketing allows for practical analysis. With bulk advertising buying, data only explains broad segments. With programmatic or social media buying, you’re able to drill down and optimize on the go.

There is still an element of human touch to optimize accounts fully, but the computer can streamline the process.

The industry will need more and more analytical minds as digital advertising and data-driven strategies continue to grow in marketing.

4) It’s Everywhere

Everyone in marketing knows that mobile is far beyond being a trend. It’s a pillar of any quality marketing mix. But, there’s more to digital marketing than just mobile and desktop. Advertising is everywhere.

It’s TV streaming devices, tablets, apps, watches, and more. It’s an ever-changing landscape. While there are some limitations to programmatic’s success on mobile, it does provide users with a broad reach with little excess effort.

While traditional marketing efforts had to be negotiated on each platform, digital allows users to bid across multiple platforms to reach their audience.

In digital marketing, finding your ideal audience is crucial. Target’s digital capabilities are helping marketers easily reach that goal.

5) It’s Time-Saving

The best part of any digital marketing automation is that it saves you time and effort. Even more than monetary investment, time can be a business’ most precious resource.

There’s a limited supply, especially for entrepreneurs and small business owners.

If you can save an hour by automating a process, that’s an hour you can invest in other aspects of your business. Digital marketing is very much becoming a system of prioritization.

Which social media site should you be on? What about the email platform? Who should you assign an account representative to the newest client?

With digital marketing, the amount of time you save with automation can help you free up bandwidth for many other decisions that need to be made daily.

6) Mobile

Mobile was a hot trend a few years ago. It was going to revolutionize the way users interact with brands online. And it has. Mobile is one of the rare internet trends that met all expectations.

The future of internet marketing will revolve around mobile users. The number of smartphone users continues to grow. Tablets and wearable technology will continue to add to the popularity of on-the-go connectivity.

Understanding the Mobile User

Desktop users and mobile users aren’t always looking for the same things. Mobile users, by definition, are on the go and are often looking for location-based results.

A desktop user might want a long list of available products, but a mobile user wants to know what hours you’re open because they’re already on the way to you. Marketers and web designers need to realize this difference and deliver the user experience the mobile user expects.

Whether in ad copy or a responsive website layout, the experience will need to be tailored to mobile. Does it still look like digital media has the upper hand in traditional vs digital marketing?

New Metrics of Success

The mobile user expects a website, app, or whatever to work just as well on their phone as it would on a desktop. Page load speeds will become a crucial success factor for internet interactions.

Mobile users will leave if they have to wait long. And, “long” is only a few seconds. Marketers will have to grab users’ attention quickly before they move on to the next thing. Good enough won’t cut it.

The mobile user wants a great experience, and marketers will need to find a way to provide that.

Search Engine Optimization Shift

That’s when Google officially started prioritizing mobile-friendly websites in search rankings. It was a signal that mobile was becoming more and more of a priority for Google- adding to digital media’s winning in the traditional vs digital marketing battle.

And when something is a priority for Google, it better be a priority for Internet marketers. Things like location, social media reputation, and reviews are potential relevance signals for mobile searchers.

You’ll need to manage these things closely to get noticed in future searches.

The Need For Creative Advertising

With the release of current Apple’s iOS, ad blockers have come on strong. Users don’t want to be bombarded with advertising that might ruin their online experience.

Mobile ads can increase page load time, which, as mentioned above, is a bad thing. They can also detract focus from the content. Internet marketers will very shortly have to find ways around this growth in adblocking.

Finding ways to advertise in unobtrusive formats will be critical. Native advertising and great content experiences could be a way around it.

7) Buying On The Go

If marketers love one thing, it’s getting online conversions—earning Internet revenue.

Mobile provides an interesting roadblock to eCommerce because most of the time spent online is spent watching videos or browsing social media. There are typically a lot of steps in between seeing a marketer’s messaging and purchase.

The trend moving forward is adding more buying opportunities straight from third-party websites. Like the giant social media, Facebook and Pinterest have added buy buttons for marketers on their services. More are likely to follow. Mobile marketers will be seeing a lot more options for removing steps from the buyer’s journey.

The Traditional and Digital Advertising Budget Trends

It is no secret that digital activities have increasingly become more critical for companies on their advertising budgets, and this importance is now being reflected in overall statistics.

First, what are the different components of digital and traditional advertising?

We can list several digital advertising ways, but Display Advertising, Search Engines, and Social Media are the most important.

Display Advertising

Display advertising refers to the spots that marketers can purchase on websites or networks.

An example is purchasing space on website news through web banners, pop-ups, or floating ads.

Due to the emergence of millions of new websites, the online ad space has become a less expensive option allowing brands to continue disseminating their messages in many areas.

Companies can purchase pay per clicks ads for up to 1 penny.

For marketers with tight budgets, online advertising fits in well. Digital campaigns are great, but they serve no purpose if consumers cannot find your website or brand when researching their next purchase.

Search Engines

This is precisely why the search engine is increasingly becoming vital. Search Engine Marketing services help brands improve their popularity and visibility online with Google and Bing’s dominance.

The bright side of this kind of platform is getting in touch with the consumers when they are interested in and researching something that may result in a sale or a lead.

According to eMarketer, the oligarchy comprising Google, Facebook, and Amazon has received 70% of the total spending on a digital advertisements. Another recent survey by Factual and Lawless found out that, on average, nearly half the advertisement spending by a marketer is concentrated towards the big three of Google, Facebook, and Amazon. 37.2% of the total Digital Ad Spending goes to Google, while 33.0% of Mobile Ad Spending.

According to the CMO survey 2018, companies in which digital marketing leads activities were at a whopping 82.7%. Spending on SEO will reach approximately $80 billion on an annual basis.

Social Media

Of course, you can’t talk about digital advertising without mentioning Social Media. Facebook and Twitter lead the charge in this sector, but platforms like Instagram, YouTube, and Snapchat quickly catch up as they increase their user base.

For example, Instagram has reached 500 million daily users, and last year has started selling advertising on its platform. Pinterest recently used the same strategy of selling promoted posts (Pins in their case).

In 2015, Snapchat released its advertising services, asking to shell out a minimum of $750,000 a day to advertise on its social platform.

According to the CMO Survey last year, 70.0% of businesses expect to increase their social media management investment, showing a solid growth trend in this king advertising budget.

In a report in February 2018, CMO Survey indicates that companies currently spend 12% of their marketing budgets on social media., compared to what it was in 2009, 3.5%.

Other digital marketing types are e-mail marketing, affiliate marketing, online classified advertising, and content advertising.

Traditional advertising refers to television, radio, newspapers, magazines, billboards, and outdoor properties. Although budgets proportionally continue to decrease compared to digital, the number of eyeballs that traditional advertising reaches is precious.

What are the advertising budget figures?

According to Kantar Media, in 2018, the total advertising budget was estimated at a healthy $151 billion in the United States, a 4.1% growth against 2017.

While the number remains consistent with previous years, the percentages of traditional vs digital marketing (advertising) expenses continue to experience some change.

According to a recent Strategy Analytics report, digital video will represent 20% of global video ads in 2023, with a +10.8% CAGR over 2018 to 2023, reaching $51B.

Another font, Emarketer, expects expenses in digital ads to reach 129.34 billion in 2019, accounting for 54.2% of ad budget in the United States alone (which gives us a total number of 238b, much above the previous year spend mentioned by Kantar).

Even though Google has been still the leader in spending in the digital budget, the drivers behind the increase of totals are led by social media sites like Facebook and Amazon, with a 31% estimated share in 2019 of the total digital budget. The report highlights that this trend is not likely to change anytime soon.

The Major Victim of Increasing Digital Content

The primary victim in digital spending will most likely be print advertising, as print budgets continue to decrease, a significant downfall for traditional media.

According to Statista, print expenditures continue to decline for consecutive years. According to the estimations, print advertising expenses have dropped from 26.02 billion in 2016 to 24.34 billion in 2019. It’s estimated to decrease even more in the following years.

However, newspapers and magazines are increasingly prioritizing their websites to attract online advertisement revenues.

The issue that arises when discussing traditional budgets is that the return on investment is more challenging to measure.

Meanwhile, digital investments are straightforward to measure. Besides that, people are often looking for Social Media websites to consume live and on-time news instead of reading printed newspapers the next day.

The Next Big Consumers

Millennials are the next big consumer market, and the rate they rely on digital and mobile for purchase decision-making is staggering.

While digital advertising continues to eat up television percentages of the overall marketing budget, its forecast is still stable due to the number of people traditional media can reach. It looks like a balanced battle of traditional vs digital marketing.

Millennials rely on the Internet for consumption, which increases the importance of digital in the advertising budget. As mentioned before, the print sector is currently in the main danger, i.e., traditional media being in trouble when we talk about the battle of traditional vs digital marketing.

Traditional vs Digital Marketing: So which is winning?

Due to the rise of digital and consistency of traditional advertising, it is still significant for agencies and in-house marketers to practice integrated advertising and marketing, meaning a mix of all advertising types to communicate its message.

As we have alluded to, each advertising type has its pros and cons, and your advertising budget must be versatile. So, traditional vs digital marketing may remain a battle unsolved for many more years to come.

Nobody can deny the tremendous behavior change in ad consumption, being much more native and targeted through the infinite possibilities that digital advertising brings to the table.