“The Future of Digital” presentation, artfully strung together by Business Insider’s CEO & EIC, Henry Blodget, is one of my favorite decks of the year. Despite the fact that Mr. Blodget’s name is the perfect combination of “blog” and “gadget,” his 137 slide presentation paints a cohesive picture on the global state of digital. He outlines the type of trends to which we all must pay close attention or else get left behind.
I highly recommend that every marketer take the time to peruse the presentation. However, knowing the crazy work/life this time of year, I thought I would share my Cliffs Notes version. BTW, on a very unrelated side note, see how Cliffs Notes have gone digital. Should have known.
• The digital medium is only 20 years old: That’s nothing. Only 7,300 days to be precise. But in this short time, every other single medium – print, radio, broadcast, etc. – has fundamentally adjusted around digital. The name of the game is evolution. If you don’t evolve, you’ll quickly find yourself vying for the newspaper boy’s job. And trust me, that field of employment is quite scarce.
• 2+ Billion people are online: While a large number, that’s only 1/3 of the global population. The rest of the world is still scheduling parties via drum beats and smoke signals. I lost track of the all the holiday Evites already. Where there’s digital, there’s money.
• Mobile, mobile, mobile: The future of mobile is here today. Smartphones and tablets are kicking the C out of PC sales. Not a newsflash. We do everything on mobile that we do online. Play games. Email. Surf the web. Watch video. Shop. Listen to music. Take pictures. Bank. But we do it just a little bit differently. Think about how you apply this to your media strategy today!
SIDE NOTE: We’ll see if the rise of Ultrabooks can help change the game for PC makers. Intel is 100% behind the effort, but it will take time to scale globally. I’m a huge fanboyof ultrabooks. I’m writing this blog on one now. It’s like a feather in my bag. Even with a Windows OS, it takes about 10 seconds from pushing Power On to launching apps. And the battery life is 9 hours. Oh, and it comes with all of the business ports needed (RGB, HDMI, USB, etc.). Does your tablet or laptop do that?
• US smartphone sales are stalling and China is growing: New US smartphone buyers will be older and poorer. The rest of the US market is reaching saturation. China now accounts for 25% of smartphone sales and is already twice the size of the US market. Despite a slowdown in China’s growth, it is still growing like a Chia Pet. If you’re not thinking about China, what are you waiting for?
• Digital content revenue keeps growing: People are paying for content like never before. Revenue from paid content is up around 7x in the past 6 years. iTunes. Netflix. Kindle. NY Times. Wall Street Journal. Hulu. The list goes on. Apple and Amazon are winning. Traditional print publishers are losing. The paid content model is not offsetting their loss of print ad revenue.
• Digital has changed advertising forever: The biggest companies spend 40% of their ad revenue online. TV is still making the most money, but the growth is not with the old core network stations. Between 2010 and 2011: Network TV down 5%. Local TV even worse, down 7%. Magazines down 6%. Newspapers down 7%. The only real winners are online, up 23%, and cable TV, up 9%. If you want to see the other place winning. Digital video. Netflix, YouTube, Hulu, etc., revenue is still heading up the hockey stick.
• The Google Invasion: Google makes more money in domestic ad revenue than all of the newspapers and magazines combined. Google does not only own search, but they are buying-up the entire advertising equation. Check out our CEO, Dick Reed’s, blog in the Economist and you can learn about the “Wild West of Marketing Analytics” and what role Google is playing.
• Display advertising is a commodity: Display advertising is flattening. The likes of Facebook, where 1/7 of the global population resides, is sucking up the dollars. AOL, Microsoft, Yahoo, the portals, they’re all getting crushed. Now it’s all about RTB (real-time bidding), which projects to keep growing. If you don’t know how these platforms allow you to zero-in on an audience like never before, learn now.
Shameless plug: If you want to learn the latest targeting techniques – named account targeting, site retargeting, search retargeting, impression retargeting, suppression list targeting, etc. — send me a note and we’ll give you our “Technology in Marketing” tour. Most marketers are blown away when they realize what they can do these days. Say goodbye to waste and hello to results.
• The old-school retailers are creating advertising businesses: Yes. You didn’t read that wrong. Target. Best Buy. Wal-Mart. These “e-tailers” are raking it in. Amazon is already at $1B+ a year in ad sales. The blending of online and offline is stronger than ever. Half of my home life is spent with yet another LivingSocial deal. I think I need to hide the credit card from my wife. Yeah, fat chance.
• The advertising gap between consumers and advertisers: We are now ultimate, multi-tasking content-consumption beasts. We surf the web while watching TV. We play games during commercials. But the gap between where consumers are spending their time and where advertisers are spending dollars s big. Look at US ad spending versus consumer time spent by media:
• Print is 7% of time spent versus 25% of spend
• Web is 22% of spend versus 26% of time
• Mobile is 1% of spend versus 10% of time spent WOW
Mobile ad growth is much slower than TV and the internet in the first 5 years. Search still accounts for 62% of mobile ad spend. Google owns yet another medium. But “native” in-content ads are gaining ground. In-app advertising is working. 2/3rds of the 100 iPhone apps that make the most money are free to download. Get it. Got it. Good.
The morale of the story is that the pace of change in the advertising industry is at unprecedented levels. If you don’t have a POV on this stuff, get one. The future is now. Digital, as Mr. Blodget puts it, is a 4-screen world. Mobile. Tablets. TV. PCs.
Think about your strategy in each one of these areas. The quicker you innovate, the quicker you’ll leave your competition in the dust. At least that’s how we see it when working with our clients.
As Howard Stern’s dad would say, “don’t be stupid you moron.” May your holiday season be bright (and include some really awesome new gadgets).
Just Media, Inc.