As we enter 2017, the advertising sector can expect new innovative ways to reach potential customers. Digital has become the likely top suitor for marketers for years to come. With digital surpassing TV as the largest channel in terms of advertising spend 2016, the expectation is for the trend to carry over into 2017 and beyond. Digital advertising provides new opportunities to reach audiences as 2016 innovated in areas such virtual reality, augmented reality, and promoted live-video streaming. The past year saw US digital ad sales increase by 18%, accounting for $70 billion. Currently, desktop is the highest US digital ad spending format at $37 billion, but saw a percent decrease in the past year of -2.1% with expectations of further decline. As desktop seems to be slipping, mobile and social saw 54.2% ($33 billion) and 48.2% ($16 billion) increase, respectively, in 2016. These channels also expect to see the largest increases for digital ad spending in 2017. Leading the charge of projected increases in spending and revenue is social media and online videos.
US social networks will play a key factor in US digital ad spending as its estimated 23.3% ($19.31 billion) of digital ad spending will be directed toward social networks in 2017. The past year saw direct-response spending on Facebook in the second quarter of 2016 rise 154% when compared to the first quarter of 2015. Following that, a recent survey showed that 45% of the marketers plan to increase spending on paid social this coming year. Meanwhile digital video accounted for 14.3% of ad spending in 2016, and the idea of it continuing to increase in 2017 due to the growing confidence from marketers on ROI for video. In 2017, social media and digital video advertising may see a direct correlation as both can positively affect the other.
In 2016, live video streaming and virtual and augmented reality became more well-known to the public. Facebook Live was introduced and Twitter teamed up with the National Football League to stream live games on their own video platform, Periscope. In June, Facebook agreed to pay upward of $50 million to over 100 video publishers and celebrities to appear in live videos on their platform. Other social media platforms have started their own live streaming with YouTube Live and Instagram joining in on the trend. Even radio providers are beginning to test live streaming as New York’s WABC Radio in October began streaming three of its shows live, with the idea to implement local advertising. The trick will be how to monetize live streaming, but according to eMarketer, 17% of agencies and 19% of in-house marketing will definitely be investing in Live Stream Video, while 71% of agencies and 60% of in-house “might” be investing. The other two popular trends expected to take off in 2017 are virtual and augmented reality. With the success of Pokémon Go comes not only an interactive experience for consumers but a big potential profit for marketers. Research firm IDC predicts 30% of consumer-facing companies in Forbes Global 2000 will experiment with AR and VR as part of marketing efforts in 2017. Facebook has already started rolling 360-degree video and photos, showing just the start of bringing real-time, interactive experiences to mobile and desktop screens. By 2020, over 20% of commercial media on Facebook will be 360-degree video and photo content. Social media and video advertising are a likely pair to find success in 2017 as the opportunities to reach audiences are seemingly endless.