Digital Brand Advertising Spend to Outpace Direct Response

January 13, 2012

digiday-online-ad-spend-increases-for-2012-jan12.gif64% of brand marketers plan to increase their online brand advertising spending this year, compared to 49% who plan to increase their direct response budgets, according to [download page] a survey released in January 2012 by Digiday, sponsored by Vizu. In fact, 44% of brand respondents project their interactive brand ad spending to increase by more than 10%, and 22% put their planned increase at more than 20%. By contrast, just 20% plan a direct response advertising budget increase of more than 10%, and only 13% of more than 20%. Overall, 60% of brands indicate that they are allocating spending away from direct response to brand advertising initiatives.

Agencies provide a similar outlook, projecting 54% of digital ad dollars to be spent on brand advertising, with the remainder on direct response. Agencies were even more aggressive than brand marketers on growth, with 71% projecting an overall spending increase in brand advertising this year. And two-thirds of the media sellers surveyed indicated that the majority of their online ad dollars will be generated by brand advertising in the coming year, with a slight majority indicating that they expect brand advertising sales to grow, compared to 32% expecting sales growth in direct response advertising.

Brands Look to Mobile, Social Media

The most popular channels brands cited for growth in digital advertising were mobile (69%) and social media (63%). 57% of brand respondents also said they would increase their online video spending. Rich media advertising and standard display budgets were projected to remain flat by 57% and 60% of brand respondents, respectively.

Among agencies, mobile is also predicted to experience the greatest increase in digital ad spending, although agencies expect online video advertising growth to exceed that of social media.

Metrics Seen Biggest Hindrance

digiday-improvements-that-would-incentivize-increased-ad-spend-jan12.gifThe top 3 improvements that brand respondents indicated would lead them to increase brand advertising spend were: improved clarity around ROI (68%); the ability to verify that their brand advertising created the desired result (56%); and the ability to use the same metrics to evaluate brand ad effectiveness online as are used offline (53%).

In fact, when asked for their preferred metrics to calculate ROI, 55% of brand marketers said they would prefer to use the exact same metrics used in the offline medium, with a few additional metrics specific to the online medium. Only 15% would prefer to target only metrics specific to the online medium. However, the vast majority (77%) of media sellers said they were most likely to report only metrics related to the online medium.

Brand Lift Most Important

Data from the “Online Brand Advertising 2012 Outlook” indicates that the leading metric for determining the effectiveness of brand advertising is brand lift, cited by 80% of the brand marketers and agencies surveyed. For brands, sales (57%) are the second-most popular success metric, while for agencies, interaction rates with the advertising are next. Other metrics cited by brands include click through rates (29%), shares or re-posts (29%), and dwell time (20%).

About the Data: The Digiday/Vizu survey was conducted in November and December 2011 among 450 digital marketing and media professionals, who completed an online survey. Participants were asked to identify themselves as brand marketers, media agencies, or media sellers, and responded to questions specific to their classification.

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