As the digital media market continues to mature, and strategies to integrate online and offline advance in established markets, it’s good to levelset to take a macro analysis of the role of digital in media economics on a more global level – particularly in the current global economic climate.
Back in 2015, McKinsey predicted digital media would continue to be the #1 source of growth in media, and that by 2019 digital will account for 50% of overall media spend. By any measure, they were right. The only source of non-digital growth for the past 5 years has been out-of-home, marked by its embrace by startup brands in major markets.
However, McKinsey’s most salient observations relate to the differences in media habits in developed markets versus developing ones, and the recommendation, albeit soft, not to count traditional media out just yet.
In many markets, broadband and television infrastructure penetration has yet to reach saturation, particularly in parts of Asia Pacific and Latin America, where McKinsey predicted the greatest growth in consumer spend through 2019. In other words, as wealth and access to new media increases in these regions, traditional media is still the best way to reach these consumers as they make the “shift” to digital.
For example, Mexico’s business-friendly environment places it 3rd among Ernst and Young’s rankings for most cost-friendly emerging markets. Yet, Mexico has only a 21% smartphone penetration rate, and correspondingly low digital consumption. Yet Mexicans consume traditional media voraciously, watching an impressive 5.75 hours of television per day, 3rd highest in this same index. India too has low digital penetration, but the world’s largest box office attendance, 160 million pay-TV households, and 94,000 newspapers. Mexico’s telenovelas and India’s Bollywood culture make them noteworthy, but these emerging markets aren’t alone: according to the WHO, 70% of those on the African continent will not make a phone call in their lifetime due to lack of telcomm, infrastructure, yet 70% of the continent’s population are reachable by radio. In many emerging markets, traditional media is still indispensable.
Further, consumers don’t necessarily separate their habits into a “digital vs. non-digital” binary, either. For consumers, it’s more about which media offer the most interesting experiences or content, seamlessly. For some, a magazine cover may catch one’s eye and be in closer reach on a drugstore shelf than subscription to the digital version.
Developed markets are also witnessing a resurgence of interest in live and physical experiences, as well as so-called “slow” media. British communications agency Protein released a 40 page Slow Report, investigating how younger generations value relationships and health as measures of success, alongside traditional metrics like wealth. It also discusses the emergence of thoughtful, “slow” media consumption versus a fast and fleeting intake of goods and information. Monocle Magazine, the flagship of a mini media empire that’s flourished – at least in part – from this nostalgia for “slow” media, predicts good things for the fate of print. If nothing else, this may be due to an effect McKinsey predicted: that the decline in print spend would eventually reach an equilibrium as household abandonment of print subscriptions in favor of digital would eventually level out.
International advertisers, and investors, would do well to remember that, while digital seems to be the “answer,” there is truly a continuum of digitization in both developed and emerging markets. Consumer habits cannot be codified into black-and-white, digital-or-traditional categories and neither should traditional and digital media planning. There still is a lot of value to be seen from a print or TV spot, or brick-and-mortar, in-person experience.
Counterintuitive though it may be, if your digital media planning happens in a digital vacuum, you’re missing greater opportunities.