Digital advertising and online video surge continues
Picking the right tool for the right job

Despite an overall gloomy forecast for global advertising, GroupM estimated positive growth for digital media in its latest report released Thursday. The global media investment management firm projected that growth in measured digital media investments will rise between 16 percent and 18 percent to approximately $100 billion globally in 2012, compared with a previous 16 percent forecast. That amount accounts for about one fifth of the entire 2012 measured ad spend.

Internet advertising budgets continue to grow in every country. The GroupM report forecast a 22 percent spending uptick in 2013, as digital spending trends continue an upward trend globally, regardless of local economic conditions.

Online video watching and advertising breaks record

More than 180 million U.S. Web users viewed a record 33 billion pieces of video content--and 11 billion ads --in June, according to comScore. Driven primarily by video viewing at YouTube.com, Google sites ranked as the top online video content property in June with 154 million unique viewers, followed by Yahoo Sites with 51 million, Facebook.com with 49 million, VEVO with 46 million and Viacom Digital with 39 million. Last month, time spent watching video ads totaled 4.6 billion minutes, with BrightRoll Video Network delivering the highest duration of video ads at 805 million minutes.

Overall, video ads reached more than half (53%) of the total U.S. population an average of 68 times during the month.

Macro View

A Commerce Department report Wednesday showed builders broke ground for more new homes in June than in any month in nearly four years. Wednesday's housing report from the Commerce Department showed home construction jumped 6.9 percent from May. Because builders cut back so sharply during the downturn, "if there's an increase in the number of households of any magnitude, the homebuilders will now benefit," Daniel Alpert, managing director at Westwood Capital, an investment-banking firm told the Wall Street Journal last week.

Meanwhile, last week’s cover story in the staid Economist argues that the U.S. economy is remaking itself (see article) thanks to the private sector. “Old weaknesses are being remedied and new strengths discovered, with an agility that has much to teach stagnant Europe and dirigiste Asia.”

What’s more, last week, the Mortgage Bankers Association said applications for home mortgages jumped last week on a surge in demand for refinancing as interest rates for 30-year mortgages fell to a record low. Other data in recent weeks has shown a sharp increase in signed contracts for home purchases in May, as well as rising home prices. “Housing continues to be the one sector of the U.S. economy that is outperforming expectations,” said Michael Gapen, a Barclays economist told Reuters.

Conclusion

Despite this morning’s sell-off in U.S. equity markets, the latest economic data confirm our economy is clearly in a slow growth mode and that won’t change much, regardless of who wins the November elections. Yes it’s going to be slow. And yes there’s going to be some growth. If you’re trying to reach your target customers, you need to be selective and online video and digital advertising absolutely have to have a place in your marketing mix—but they’re not magic silver bullets. You have to pick your spots carefully and mix video and digital into your overall tool kit.

My dad is a lot handier than I’ll ever be when it comes fixing things around the house. Sure he’d sometimes fix things that weren’t really broken, but it’s his intrepid appetite for experimentation—not a manual or eHow video--that eventually teaches him how to get the job done.

“There’s a tool for every job, and a job for every tool,” he’d admonish me. “But don’t ever try to use that fancy new cordless drill to fix everything on your Honey-Do list.”

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TAGS: Digital advertising, online video, GroupM, comScore, Commerce Department, home building, Mortgage Bankers Association, Barclays, BrightRoll Video Network