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 in the last decade or so, things have changed drastically, Marketing has been moved to our pockets. Changes in ways of content consumption have been affecting companies' budgets and driving marketing decisions toward a dispute between traditional vs digital marketing.

When you need to reach a high volume of consumers fast, the decision of traditional vs digital marketing has become hard.

Although in the last few years, we've seen a significant increase in digital channels consumption and growth in the digital marketing budget, the capabilities to scale up are still lower than the traditional channel.

Why digital marketing is evolving so fast and how long do companies will still invest in traditional channels? In this article, I will show you some reasons for that change and some market figures to help you and your company in future marketing budget decisions.

The Digital move

Digital Marketing written on blocks
Digital Marketing has been gradually replacing traditional media

The speed with which the users consume digital content on the internet, digital marketing, and advertising are both taken exceptionally seriously by big brands. The same goes for the new business and the ones who are already established.

Even if your business has created room for itself in the market, an efficient digital marketing plan is necessary to retain the consumer base. Moreover, any business looks towards growth and to realize the full potential of the idea it is based on.

Hence, digital marketing is becoming increasingly necessary for businesses if they want to attain and stay on top.

Impact of Digital Content on Traditional TV’s Future

In-home entertainment was primarily driven by the radio with families huddled around, listening to their favorite programs—until there was television. From that point on, visual storytelling has dominated.

Old fashioned television
If you were born before the 90's you most probably had a tube TV at home

The big players in distributing this television content were the big 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. Now?

ABC website in 2000, first years of its existence

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 do not be forgotten y this avid digital consumer.

ABC.go, adapting the content to digital consumption

Untethering from the 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 now can mean a myriad of things. You could have been streaming a show on your laptop.

A cup kept in front of a screen; on it is written Netflix
Netflix

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. Television happens everywhere.

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

Online streaming on a tablet
Streaming on phones and tablets became the only way to watch video content for some Americans

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 of it.

The End of Broadcast Networks and Cable?

Traditional television is time-dependent, location-dependent, and typically more expensive than third party digital alternatives. So it must be on its way out then; another important point to consider while using traditional or digital media.

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, there are still a lot of people watching traditional television—about 36 hours a week of it.

People waiting for the curtain at a show to lift
Award shows on TV- still relevant

Live event-based programming like the NFL and award shows are still huge draws. Cable shows yet reach millions. Audiences care about the content, 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’s going to 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 for them in traditional vs digital marketing. Traditional television will survive, but the distribution structure will need to be shaken up to compete.

Why does it matter that digital consumption is increasing?

The primary monetization structure for television is in advertising. Thirty-second commercials that break up the action have been paying for the content for years.

A mobile user streaming on mobile
Digital consumption is increasing

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. It’s particularly costly due to high competition forcing higher quality standards. Innovation is needed to overcome these challenges.

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.

Two men video-graphing an interview of another man
Video content

Technology is going to 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 try and 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.

Various social media platforms' image icons on a screen
Digital platforms are arriving every day

Often the competitive edge in digital marketing 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. There are a lot of complex pieces that make up programmatic marketing, but it boils down to using data, algorithms, and machine learning to optimize digital advertising.

Data and analytics on a laptop screen
Analytics

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

Programmatic Definition by Smart Insights

With the definition out of the way, let’s jump into how programmatic is helping to move digital marketing forward.

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.

A set of audience
Know who your audience truly is

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.

There are still limitations to that approach 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. If you know who your audience truly is, it 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.

Traditional media vs Digital media
Data is winning the battle for digital marketing vs traditional marketing

The real-time bidding nature of digital marketing allows for effective 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 is there to 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

Mobile Consumption on the go

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 wide reach with little excess effort.

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

In digital marketing, finding your ideal audience is crucial, target 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.

Coins with a clock in the background
The time as a valuable resource for marketers

There’s a very limited supply of it, 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? Which email platform? Which account representative should be assigned to the newest client?

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

6) Mobile, Mobile, and Mobile

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

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

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.

Map being shown on  a mobile screen
Mobile user experience

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 is expecting.

Whether it’s 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 an 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.

A mobile phone streaming in front of a desktop
User experience is everything

Mobile users will leave if they have to wait long. And, “long” is only a few seconds. Marketers will have to grab the attention of users 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 the day that 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 the winning of digital media in the traditional vs digital marketing battle.

Online marketing written on a tablet screen
SEO is important for Google ranking

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 signals of relevance for mobile searchers.

You’ll need to manage these things closely if you want to get noticed in the 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.

A vintage car parked in front of a creative wall
Creative advertising

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 very shortly will have to find ways around this growth in adblocking.

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

7) Buying On The Go

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

E-commerce website on a mobile screen
Online buying

Mobile provides an interesting roadblock to eCommerce because most of the time spent online is watching videos or browsing on 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 online third-parties. Another downfall for traditional media in the battle of traditional vs digital marketing.

Twitter and Pinterest have added buy buttons for marketers on their services, and 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 important 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 ways of digital advertising, but the three most important are Display Advertising, Search Engines, and Social Media.

Display Advertising

Example of display advertising on the Washington Post

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 if consumers aren’t able to find your website or brand when they are researching for their next purchase, they really serve no purpose.

Search Engines

This is precisely why the search engine is increasingly becoming more important. Search Engine Marketing services help brands improve their popularity and visibility online with good real estate on sites like Google and Bing.

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

Google search screen on a laptop screen
Google search engine

According to eMarketer, the oligarchy comprising Google, Facebook, and Amazon has received 70% of the total spending on a digital advertisement. Another recent survey by Factual and Lawless found out that on an 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 are quickly catching up as they are increasing their user base.

Instagram platform
Social Media advertising

Instagram, for example, 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.

Snapchat logo
Snapchat

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

In a report on 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 types of digital Marketing are e-mail marketing, affiliate marketing, online classified advertising, and content advertising.

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

What are the advertising budget figures?

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

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

A calculator kept on a traditional vs digital marketing budget
Ad Budget: traditional vs digital marketing

According to a Strategy Analytics report published recently, 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 spends on 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 previous year spend mentioned by Kantar).

Even though Google has been still the leader on 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.

Digital marketing estimated spend in 2019, by emarketer

The Major Victim of Increasing Digital Content

The major victim in digital spend will most likely be print advertising, as print budgets continue to decrease. A major downfall for traditional media.

Newspaper stack
Print Media

According to Statista, print expenditures continue to decline for consecutive years. According to the estimations, print advertising expenses have declined an estimated from 26.02 billion in 2016 to 24.34 billion in 2019 and are estimated to decrease even more in the following years.

Print Spend in USD Billion

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

Magazine
Magazines being affected by the increase of Digital Media

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

Meanwhile, digital investments are extremely easy to measure. Besides that, people are often looking for Social Media websites to consume live and on time news, instead of reading printed newspapers on 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. Looks like a balanced battle of traditional vs digital marketing, isn't it?

Millenials – the next big consumers

Millennials rely on the Internet for consuming, 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 danger 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 very important for agencies and in-house marketers to practice integrated advertising and marketing, meaning a mix of all types of advertising to communicate the brand's message.

As we have alluded to, each type of advertising 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.

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

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