New data to be released later this week by Borrell Associates reveals a skyrocketing spike in advertiser spending in the “Promotions” category as compared with advertising. Another eight percent increase this year will put promotions spending at $630 billion, over twice that of advertising spending. Borrell’s promotions category has long been a barometer of advertiser spending related to the Web, and this dramatic increase includes the raging hot category of content marketing.
To be fair, Borrell’s promotions category is very broad and includes a great deal of different types of spending, including coupons and discounts. Borrell research guru Kip Cassino likes to refer to a discount deal on a can of peas. The money spent to tell people about the discount would be advertising, but the price difference between the can of peas before the discount and after comes from promotions. However, the category also includes efforts by companies to recruit customers online.
Now that business and industry are able to function as media companies themselves, their spending habits are shifting. The Content Marketing Institute reveals the kinds of tactics that businesses are using with consumers. The graph below shows that social media, articles on their websites, eNewsletters, videos and blogs are the top ways businesses are using to reach customers.
The Borrell report shows a flattening of advertising, which ought to speak to those in the pure advertising business. Advertising is not going away, but the growth is clearly in promotions. Looking ahead to 2017, the report projects that digital promotions will begin to close the gap on digital advertising, growing at a rate of 150% compared to 90% growth in online advertising.
Borrell has always been ahead of everybody else in projecting what’s happening with businesses away from advertising, and this report is no exception. The company hosts its annual Local Online Advertising Conference March 4-5 in New York.