The writing is on the wall for traditional advertising — or at least according to Reuters.
Based on a news agency report last year, the global ad industry is expected to face sustained losses.
There are several reasons for this.
The first is a growing appetite for new media. With millions of people being discouraged from venturing outside, companies are less inclined to spend on out-of-home advertising such as banners, billboards, and cinema ads.
Economic fallout is may be more significant than the global financial crisis more than ten years ago.
Citing McKinsey’s report, Polar CEO Kunal Gupta points out that it would take long for ad spend to recover. Statista expects global ad spending to decline by $20 billion this year.
It is difficult to ascertain how and when the advertising industry will recover from this worldwide disruption.
What is clear is that the Covid-19 pandemic has urged companies to rethink their customer engagement strategies. They also find themselves in a position to focus on platforms that work best in this climate.
It’s no question that social media will play a crucial role in helping businesses connect with their markets.
Embracing a Paradigm Shift
Before to the pandemic, TV and other forms of traditional advertising have been losing ground to new media. Sure enough, spending on TV ads has seen a downtrend during recent years. Digital media is slowly (but surely) getting a more significant chunk of promotional budgets.
The pandemic only accelerated this shift towards digital channels. And as traditional ad spend continues to take a nosedive, more companies will turn towards social media to connect with their markets.
To get a better picture of what’s happening on the ground, here are a few essential insights to narrow down on:
- Social media usage among consumers increased by 10.5 percent in July 2020 compared with the previous year. (Source. Business.com)
- In terms of behavior, users say that social media has helped them cope with the pandemic’s effect. (Source: DATAREPORTAL.com)
- Last year, social media’s share of marketing budgets increased from 13.3 percent in February to 23.2 percent in June. (Source: The CMO Survey)
- As e-commerce continues to gain ground, 73% of marketers are putting more focus on client acquisition through social media (Source: Hootsuite)
- 56.2 percent of chief marketing officers or CMOs will be focusing on “digital opportunities,” (Source: Harvard Business Review)
These scenarios illustrate how fast the dynamics of social media usage are changing. Based on this data, companies must embrace the digital shift and invest more in social media marketing.
It will take a long time before traditional advertising makes its comeback. However, social media will have become a mainstay in every business’s marketing arsenal by then.
Indeed, investing more in social media is not just about surviving this global crisis. It is also about making the transition towards newer and better tools and strategies.
Social Media Developments to Watch For
Reliance on social media is increasing and has resulted in the development and integration of new technologies. Let’s check out a few of the essential tools already being applied:
Along with virtual reality, augmented reality or AR has been integrated with Facebook and its other business, Instagram.
AR technology is now available for use with photo and video filters that allow people to interact with digital assets. If you have been taking selfies using filters that alter the background or put cat ears on you, it’s AR that’s behind the magic!