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Media companies race to embrace digital marketing

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No sector is moving faster to embrace digital advertising than those of media and entertainment. Why? Because of consumers like you.

By reading this blog post – and, presumably, streaming video content occasionally or playing mobile games – you are driving a sea change in the way companies that broadcast news and entertainment shows, produce music and movies and create video games market themselves: As their audiences shift online, so must they.

It should be no surprise, then, that media and entertainment companies are leading the pack when it comes to digital advertising. The two sectors are projected to account for 10.3% of all digital ad spend this year, reaching $5.15 billion, according to an eMarketer report out today. That’s 21.6% more than last year’s $4.23 billion.

“These segments share the common challenge of a difficult transition from physical to digital media. As they make this shift, they are relying on advertising to provide a greater share of monetization than in the days of packaged media,” lead author Paul Verna tells SmartBrief.

The report notes that digital advertising is proving crucial for these sectors as they grapple with evolving revenue models.

“These marketers are using tactics such as programmatic buying and screen-neutral campaigns to increase the efficiency of their efforts,” the report says, noting that enhanced search and native advertising are also in the mix as marketers experiment with digital strategies.

Driving the rapid embrace of digital advertising in these sectors is, in large part, the rise of video and rich media advertising. Verna says video ads are “the priciest and fastest growing format in the digital advertising ecosystem.”

Video is expected to go from 11.7% of digital ad spending this year to 15.5% by 2018, while rich media jumps from 6.1% to 11.3% in the same time. Total video spending is projected to reach $12.27 billion in four years.

Media and entertainment companies already specialize in producing that sort of content, so the ad formats are a natural fit.

“We’re seeing a lot of advertisers complement their television investment with online video,” Google’s Brian McDevitt tells eMarketer.

The maturity of social media as a marketing platform is also drawing ad dollars from media and entertainment companies. The gaming sector in particular finds social media valuable as a way to raise the profile of games.

“The vast majority of games are in need of discoverability,” says Steve Carlin, Facebook’s global head of game strategy.

The practice of second screening is directing greater media-and-entertainment ad dollars at mobile as well. “Marketers know that consumers increasingly watch TV shows with a smartphone or tablet in hand,” the report notes.

The study differentiates between companies focused on media – such as television broadcasters – and entertainment – such as movie studios – but the two together form the fifth largest vertical in digital ad spending.

You can read more about the report at eMarketer.