Last year, spending on digital marketing grew by 44% in the United States and Britain, bringing the total marketing value to $52 billion. A study estimates that the global outlays on such ways of advertising are approaching $100 billion. A significant increase in the use of digital marketing can be seen, as its appeal focuses on enabling brands to target their consumers directly via social media, SEO or voice-activated assistants. With upcoming complaints about fraud in online advertising, it is not surprising that businesses are looking for in-house solutions.
According to Damian Ryan, a partner at UK accountancy firm Moore Stephens, which conducted the survey, “marketers are seeking to build in-house strength and are set to spend more on digital marketing to remain competitive. Our research finds that this budget is coming from media spend and will have a resounding impact on the value of media-centric agencies.” The Moore Stephens survey, conducted with advertising and media consultancy WARC, covered 800 companies in North America, the Asia-Pacific, and Europe.
It found that brands in Britain and North America spent 23 percent of their budgets on digital marketing, up from 16 percent a year ago. And 63 percent of American technology budgets were spent in-house, compared with 44 percent last year. Tough European data protection rules that took effect in May, as well as concerns over the data practices of search giant Google and social network Facebook – the two biggest online advertising platforms – have led several players in the ad industry to merge or retrench. The emergence of platform companies that offer a one-stop shop for marketers is another trend to watch, Ryan said to Reuters, highlighting Adobe Systems’ acquisition in May of e-commerce company Magento for $1.7 billion.
Ryan concludes that “Fundamentally, brands don’t like to trust agencies with data. The clear trend shows that brands are seeking to take control over marketing technology. Against that, we can see that, at the upper end where brands are spending more, they are still working with agencies.”