Every industry has its argo. Advertising is no different. This blog post is about one of our favorites: the media landscape, or the data and trends that define the places where advertisements appear.
But it’s not a passive process. Brands and their agencies decide where to place ads based on audience, cost, reach, data ownership, and a host of other factors. And, considering how every company is now a data company, it’s extremely important to pay attention to the media landscape and impact of media choices.
With this blog post, I offer a short review of specific channels and important shifts for brands to consider. Before we get into that, let’s discuss some broader trends.
Inflation is the elephant in every room. But it’s not the only reason costs are up in the marketplace. The U.S. midterm elections (accounting for an estimated $9 billion in political ads) and the first-ever Q4 FIFA World Cup in Qatar are examples of cyclical events that lead to increased demand, which increases advertising rates and overall spending.
Three other important shifts to consider are:
- Once a tool exclusive to bigger spending brands, programmatic ad-tech is now equally important for small to midsize brands to utilize. .
- New retail media networks are set to become the next big wave of advertising. Customization based on behavioral insights (more so than media behaviors) are a critical foundation for breaking through.
- Brands will be able to deliver ads closer to the point of purchase, increasing the likelihood of conversions and providing a new source of first-party user data. (Insider Intelligence).
Now, let’s dig in channel by channel. We’re organizing our review by how we:
- Search, covering Google, Bing, Amazon and YouTube.
- Interact and follow, including influencer marketing and all of the socials, e.g. Facebook and Instagram, TikTok, Snapchat, Twitter, LinkedIn and Pinterest.
- Shop, which is happening everywhere, especially on Amazon, Walmart and Pinterest.
- Watch and listen, encompassing broadcast TV and radio, streaming video and podcasts, online video and connected TV.
Explore, browse and read on digital platforms. Ad channels that matter here include display and NFTs.
How we search.
The current paid search landscape includes Google Ads, Bing Ads, Amazon Ads, Walmart Marketplace and YouTube Ads. Audience targeting possibilities on these platforms include:
- Lifetime value
- Products and/or Amazon Standard Identification Numbers (ASINs)
The average cost per click (CPC) for search ads across all industries is $3.53. Industries with the lowest CPC in 2022 include travel, arts and entertainment, and sports and recreation. Industries with the highest average CPC in 2022 include legal services, dental services and home improvement. Source: Wordstream. The average cost per lead (CPL) across all industries is $41.40 in 2022. Industries with the highest CPL include legal services, furniture, finance and insurance. Industries with the lowest CPL are animals and pets, automotive repair and restaurants.
Enterprise brands must develop experience utilizing bid-management platforms like Marin, Search Ads 360, and Skai to support managing hundreds of campaigns effectively. Google and Bing editors’ tools can also allow advertisers to manage multi-locations or matrix product-based companies that deal with thousands of landing pages and ads for mass changes.
More sophisticated paid search advertisers will be researching ways to leverage historical data from UA and other data sources to further their audiences. Data warehouses like Bigquery allow brands to better tailor personalized messaging for specific audiences and develop valuable business insights.
Every day, Google Ads has 259 million unique users, 4.8 billion daily interactions and more than 5 billion search queries. Brands are projected to reach $70.15 billion in spending on Google Ads by the end of 2022. Google’s cookie deprecation deadline for 2023 has brands increasingly focusing on strengthening the data platforms they use and developing first-party data strategies.
New features, and features that will grow in power and prominence, include:
- Smart bidding, which is an automated bidding system that uses machine learning to optimize conversions and conversion values in auctions. Examples include Enhanced CPC, Target Cost-Per-Acquisition (CPA), and Target Return on Advertising Spend (ROAS).
- Voice search is expected to garner 50% of all online searches as the growth of personal assistant speakers (Google Home, Alexa Dot and Siri) continues, and more people make their homes “smart” too.
- New Google Ads scripts will enable automated changes to campaigns at scale.
- Performance Max campaigns to drive more conversions across all of the available Google Ads digital formats
- Pricing rules, which allow you to update the price for products sold through Buy on Google. For example, brands can deliver abandoned-cart discounts to Google Chrome browser users who don’t convert the first time for purchases via Google Ads.
Microsoft adCenter, a.k.a. Bing Ads, a.k.a. Microsoft Advertising, a.k.a. Microsoft Ads
About 1.3 billion people use Microsoft Ads worldwide each month and about seven percent of global users leverage it for search. In 2021, Bing ad spend totaled $4.66 billion. Bing is unique in that it captures those users not using Google for their search engine at all; about 62 million searchers whom Google Ads can’t reach.
How is the platform changing?
- Bing revitalized its focus on ad inventory, data and capabilities for audience targeting.
- Bing Ads rebranded itself as Microsoft Advertising and updated the Microsoft Audience Network, which includes sites such as MSN, Outlook.com and Microsoft Edge.
- Microsoft Advertising combined the Microsoft Audience Network with Microsoft AI signals, which will allow advertisers to match searches with the relevant item in their feed.
A new cash back promotions offer may drive more sales and conversions for online retailers.
How we interact and follow
Meta consists of Whatsapp, Messenger, Facebook and Instagram. Given the number of platforms and large stable audiences, we anticipate marketers investing significantly in a metaverse/AR/VR social strategy. From shoppable posts to Facebook Shops, Meta is continuously evolving to become a retail platform that allows brands to sell directly through its different platforms, helping to condense the path to purchase and improve the measurability of sales.
Instagram is the most popular brand among marketers and the third most popular with consumers. Keep an eye on new creator ecosystem compensation on Instagram with new business options around Bonuses, Ad Payments, Branded Content and Instagram Shops. More than 90% of Instagram users watch videos on the platform every week, which demonstrates the emergence of stories and reels. Instagram Reels have proven to be better for engagement than traditional Instagram videos.
The potential reach of Facebook Ads is 2.11 billion users. U.S. advertisers will spend $58.11 billion on Facebook in 2022, which is a 15.5%+ increase YoY. Currently, Facebook Stories has 300 million daily active users. Facebook ad performance can be improved when used in conjunction with News Feed Campaigns and placement optimization.
TikTok is officially the first non-Meta app (and the fifth app of all time) to surpass 3 billion downloads. In the first quarter of 2022, the app was downloaded more than 175 million times. In the U.S., TikTok has been the top app every quarter since Q1 2021 on the App Store and has seen a 19% year-over-year increase on the Google Play Store. By many accounts, TikTok is currently the most popular social media brand among global consumers: daily usage is high and its user growth is faster than that of legacy platforms.
TikTok is expected to reach 1.8 billion users by the end of 2022. It is one of the main platforms that brands can use to reach Millennials and Gen Z. The majority of TikTok users are under 30, but as it has become more mainstream and is now 2022’s most visited website, its user base has aged.
TikTok epitomizes the rise of short-form video, as evidenced by its incredible growth alongside YouTube Shorts. Not only is TikTok the platform of choice for short-form video, but it’s also evolving to innovate with shoppable live streaming.
A key player in the digital space, Snapchat is the 12th most popular social media platform and the sixth most popular message app worldwide. According to Snapchat’s February 2022 financial results, Daily Active Users (DAUs) increased by 20% YoY to 319 million users. Snapchat had annual sales growth of only 8% in Q2 2022.
To focus its resources on community, revenue growth and augmented reality, Snapchat is axing its Pixy photo-taking drone, Snap Originals premium shows, Snap minis third-party apps and Snap Games. It also will “wind down” its Zenly map product and Voisey music feature.
For mobile advertisers and publishers looking to acquire new app users, increase revenue, and become a part of key audiences’ conversations, Snapchat still has a good connection to the younger generations.
Twitter is a microblogging and social networking platform that encourages its audience to share posts and engage with other users. Twitter’s user count is expected to grow upwards of 329 million in 2022.
Despite the ongoing chatter around Elon Musk and the future of Twitter Ads, Twitter has a strong base of users who frequent the platform for news. Pew Research Center revealed that Twitter has the highest percentage of subscribers (59%) using the site for news, as compared with the other social platforms.
Twitter made $1.41 billion from ad revenue in 2022, a 22% YoY increase over 2021. With elections on the horizon and the return of live sporting events, the platform is primed for continued growth.
Twitter promoted ads average about $0.25 to $2 per auction, Twitter follower ads average about $2 to $4 per follow, and Twitter takeovers average about $200,000 per day (Social Media Examiner). While most types of Twitter ads rely on the platform’s auction, Twitter takeover ads let you purchase specific spots and reserve premium placements.
LinkedIn is the go-to social media platform for B2B and professional networking. The total number of members that marketers can reach with LinkedIn ads increased by roughly 21 million (+2.6%) in the three months leading up to July 2022 to 849.6 million users. The power of LinkedIn ads is the ability to use first-party data, title targeting, company targeting and industry targeting. You can also reach users with specific positions or job titles.
The average CPC on LinkedIn is around $5.39, and the average CPM for LinkedIn campaigns is $6.37. CPS (cost-per-send), at an average of $0.70, is another metric in the parlance of LinkedIn advertising. Via InMail messages, you can send messages directly to users’ LinkedIn inboxes. InMail is also great for bottom-of-the-funnel campaigns—typically, users that have some knowledge of the industry and could be interested in what you have to offer (Getup lead).
One of the big weaknesses of LinkedIn Ads industry-targeting feature has been its short list of ~25 industries, except perhaps in Sales Navigator. However, the new LinkedIn Campaign Manager rolled out this year now has 375 industries.
According to Insider Intelligence forecasts, U.S. influencer marketing spending will reach $4.14 billion in 2022, with strong increases in spending on performance media channels. Online video, influencer content and social news feed ads will benefit the most. Double-digit growth will continue through 2023 when spending on influencer marketing campaigns will be $5 billion.
Not only do U.S. consumers spend more time watching creator videos over brand videos, but they’re also more likely to actively engage with creator videos than brand videos. Video influencer spending on YouTube, Instagram and TikTok is growing.
Working with nano- and micro-influencers is relatively more affordable. For example, influencers with 1,000 to 10,000 followers can charge up to $100 per post, while mega-influencers with over a million followers are likely to charge a $1,000 minimum for a post. Influencer Marketing Hub notes that social commerce will reach $958 billion in sales for 2022.
How we shop
Amazon Ads is now the third-largest and fastest-growing advertiser. It is increasingly important in the paid search space due to the high purchase intent of users on the platform.
Amazon’s ad business grew to $7.9 billion in Q2 2021 alongside record increases in sales in 2020 and 2021. Brands spent $24.18 billion in 2021 on Amazon Ads; in 2022, spending is projected to reach $32 billion. Amazon Ads is very important to the company’s bottom line, precisely because ads generally have a very high margin. After beating its bigger rivals in Q2 2022, Amazon Ads is well positioned to continue outpacing Google Ads and Meta and take more market share because its revenue comes from two of the fastest-growing segments of digital advertising: retail media and connected TV.
Amazon has shown the value of visual search by partnering with Snapchat. In contrast with Snapchat and Facebook, Amazon isn’t feeling much pain from Apple’s iOS privacy change.
Walmart is the largest retailer in the U.S. It has leveraged its strength in brick and mortar and now has a thriving online marketplace. Walmart's eCommerce sales are expected to rise 17.3% in 2022, to $71.93 billion. Walmart+, in-home delivery and express delivery have driven that growth.
Walmart said that its ads business grew 30% year-over-year, 2021 to 2022 (YoY). For reference, Walmart’s advertising business, which is primarily the Walmart Connect ad platform, made $2.1 billion in 2021.
Advertising on Walmart.com comes with many of the same challenges as Amazon: pricing, inventory, and ratings and reviews. While there are 48 customers to 1 seller on Amazon, according to the 2022 State of the Walmart Seller Report, there are 1,918 customers to 1 seller on Walmart.com. Walmart anticipates welcoming 40,000 new sellers to its marketplace in 2022.
Brands should move quickly to broaden their reach by selling and advertising on Walmart.com before competitors list their product catalogs on the platform.
Pinterest is largely seen as a platform for discovering new brands and trying out new products. Pinterest is great for seasonal businesses as it is popular during specific times of the year, like Valentine’s Day and Christmas. Pinterest reported revenue of $666 million for the second quarter of 2022, up 9% year-over-year (Adweek).
In 2023, Pinterest social buyers will make up a solid 15 percent of total U.S. social buyers (Adcore blog). Buyable and product pins allow Pinterest users to go directly to the e-commerce store that sells the items they like, providing sellers with a way to automatically connect their goods with users’ inspiration and creativity.
Pinterest ads are best for e-commerce businesses and for those working on building brand awareness, boosting engagement, and driving web traffic. Lifestyle, home improvement, inspirational and seasonal content are all extremely popular on Pinterest. Home improvement, DIY projects, and fashion and beauty content are also highly favored on Pinterest.
How we watch and listen
US TV ad spending will grow to $68.35 billion in 2022 but will trail down over the coming years, except for a slight bump in 2024 due to the presidential election and 2024 Summer Olympics in Paris. Connected TV advertising revenue is on track to grow by 25% in 2022. Cable TV has declined, losing more than 1 million subscribing customers from between the first and second quarter of 2022. Cable TV now has a U.S. household penetration of 55%. The first part of 2022 had premiere live sporting events, which led all ratings, including post-season NFL games, the 2022 Winter Olympics in Beijing and the NCAA’s March Madness basketball tournament. As a result, live sports accounted for over one-quarter (25.5%) of all TV ad impressions in 2022, an increase from 22.4% last year.
At the same time that live sports, news and Spanish language programming are on the upswing, scripted entertainment programming is waning in popularity. Nevertheless, TV is still an important marketing strategy to build brand awareness for new products and services.
Driven by connected TV and more ad-supported streaming video opportunities, online video will become the fastest growing digital segment replacing social media. Global ad spending for online video is expected to rise from $62 billion in 2021 to $95 billion in 2024. Forward-thinking brands will combine first-party audience data with other relevant data sources to ensure a robust data strategy in the absence of third-party cookies (Forbes).
Over-the-top (OTT) streaming means a user does not need a cable TV subscription in order to watch content. To stream OTT, customers only require a high-speed internet connection and a connected device that supports apps or browsers. Examples include: Netflix, Disney+, Hulu, HBO Max, Amazon Prime Video, Hulu, Peacock, Pluto TV and many more.
The accessibility of OTT content is one of the many reasons it’s so popular. Also, the platforms are increasingly producing original content that’s comparable to or better than what’s available on cable. There are now 113 million households accessing streaming services as of June 2022. This growth underscores the resiliency of streaming and consumer demand despite challenging economic conditions for U.S. households.
Radio, Streaming and Podcasts
MAGNA forecasts audio ad spend (including over-the-air, streaming and podcasting) will increase by 5.7% this year and total $16.8 billion in 2022. In the U.S. alone, podcast advertising revenue is set to surpass $1 billion in 2022 and $2 billion in 2023.
As of this year, there are over 4 million registered podcasts. Apple Podcasts boasts 2 million podcasts with 48 million podcast episodes ready to download. Spotify has 3.2 million podcasts. The genre that garners the most attention is comedy. News, true crime, and sports were the genres that followed comedy in popularity.
How we explore, browse and read
Instead of humans negotiating ad rates for each individual impression, programmatic technology uses AI and machine learning to set an automated bidding strategy to make it easier for brands to show ads to their specific target audience on a scale.
Programmatic advertising spending is predicted to grow another 16% in 2022 (match20ne). Advertisers will spend a healthy $123.22 billion on programmatic ads due to its flexible nature and continued growth in connected TV (CTV).
The key levers in the programmatic buying process are CPMs, quality of inventory, and the level of targeting. The higher the quality of inventory, or the more specific you want to be in your targeting, the higher the price. Prices also vary by industry, device, format and placement on the page. On average, programmatic display CPMs range from around $0.50 to $2. As a result, programmatic campaigns and real-time bidding can help advertisers stretch limited ad budgets 10x further.
The Trade Desk (TTD), the industry standard for managing programmatic advertising, had a 35% year-over-year revenue growth in the second quarter of 2022. Certain recent developments contribute to this figure:
- Disney signed an expanded partnership with TTD as it ramps up advertising spending on Disney+, Hulu and ESPN+.
- Amazon Web Services is making use of TDD to open up its shopper data to merchants.
- TTD is also in talks with Netflix and Microsoft after their announced partnership to bring an ad-supported tier to Netflix's streaming service.
TTD’s largest differentiator for digital marketing professionals is its neutrality—it does not own content. Google, Amazon and Facebook, on the other hand, are walled gardens—closed platforms where most tools and resources are controlled by the operator (Source: Yahoo). Walled gardens represent a conflict of interest for advertiser buyers. These companies own content platforms (e.g., Facebook, Instagram, YouTube), each of which has ad inventory that must be filled. At the same time, these companies provide tools to help ad buyers purchase inventory both on and off their platforms. The walled gardens are thus incentivized to steer advertisers to purchase the inventory on their platforms (Source: MediaMath). Walled gardens also restrict third-party tools from accessing their network.
Meta, for example, does not allow integration with third-party demand-side platforms (DSPs), which allow advertisers to buy high-quality traffic at scale from a variety of platforms. If an advertiser wants to buy ads on Facebook or Instagram, they must use Meta’s tools. Meta controls Meta’s data, and they do not allow advertisers to extract it, thereby preventing advertisers from leveraging that data in other media-buying platforms or gaining a unified view of individual consumers (Source: MediaMath).
Digital assets with unique codes and information are known as non-fungible tokens (NFTs). NFT trading is developing at an exponential rate now thanks to the advent of NFT platforms. The method of purchasing NFTs has also grown more simple, resulting in more acceptance of NFTs by normal users. The NFT Industry will hit a valuation of $80 billion by the year 2025 (Demandsage). Alongside this growth will be new customer engagement and loyalty as a result of the scarcity and exclusivity of digital goods that NFTs make possible.
NFTs may also lead to more digital product innovation, greater empowerment for their creators, and a fuller realization of the grand ambitions for blockchain, cryptocurrency and the decentralized web. There are more than 1 million NFTs available on the marketplace, with regular news about newly released NFTs on Facebook and Twitter.
A creative artist can use the skills of NFT marketing experts to maximize their online traction. This NFT marketing idea relies on them creating customized accounts and pages to promote their work to the audience actively (Site Right).
There you have it! The 2022 media landscape from the vantage point of a nerdy marketer. We are ready to dig in with your brand on strategy and tactics at any time. Just drop us a line.