Marketers are pulling money out of paid media and reallocating it to their own digital and social media channels at such a rate that the traditional advertising growth cycles the media has experienced for the past 50 years are unlikely to be seen again.
Instead, the advertising industry will average just 3.1 per cent growth for each of the next five years, barely keeping pace with inflation, consultancy PwC has forecast.
Two out of three marketers have reallocated budgets away from paid advertising channels to their own digital and social media channels, according to PwC’s annual Australian Entertainment & Media Outlook report for 2014-18, released today.
The report does not quantify the actual dollar amount spent on “owned” media, basing its findings on a first-time survey it commissioned with 162 Australian Marketing Institute members. But it found three in four respondents spend more than 20 per cent of their budget “building and maintaining their own channels” and two-thirds of those spend more than 30 per cent.
Outlook author Megan Brownlow said the rise of social media and smartphones enabled marketers to communicate directly with their customers whenever and wherever it suited them. “The implications are enormous,” she said. “That’s money that is coming out of media.”
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