Advertisers favour direct response

21 May 2014
NEW YORK: Advertisers in the US are spending an increasing proportion of their digital budgets on direct response campaigns rather than branding efforts, according to a study.

Launching a new report series, 2014 Digital Ad Spending Benchmarks by Industry, insights provider eMarketer said that 59.1% of digital advertising expenditure was expected to go to direct response initiatives this year, up from 58.4% in 2013.

Both types of advertising were growing at around 16% a year, but direct response was starting from a higher base. This means its share of the $50bn market has edged upwards slightly.

There were significant differences of emphasis, however, between the nine sectors considered by the study. The travel industry, for example, was geared much more towards direct response than most, with 74% of digital budgets earmarked for this objective. Retail was close behind on 70%.

Consumer packaged goods and consumer products, by contrast, leaned more heavily towards branding (65%).

Advertising Age noted that all the efforts of digital publishers to attract brand spending, including investments in content and upfront presentations, had not been sufficient to stem the flow of ad dollars to direct response.

"The sales are being tipped by a surge in spending on mobile, where app install ads and other direct response units dominate," it said.

Across all sectors, just over one third of digital adspend (35.4%) was being committed to mobile, with retail, an early adopter, leading the way on 37%. Healthcare and pharma, by contrast, lagged behind on 26.5%.

eMarketer also pointed to a blurring of the lines between direct response and branding, and adjusted its methodology to reflect that. It no longer defined objectives based on particular ad formats, but instead based its definitions "on a marketer's primary advertising objective, rather than the specific way the advertising is priced, measured or formatted."

Data sourced from eMarketer, Advertising Age; additional content by Warc staff
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