Publicis-owned ad agency MediaVest signed a cross-media ad deal with Google, according to reports Friday. The deal, which is Google’s largest to date, is said to be in the tens of millions. MediaVest will buy advertising on YouTube and Google’s web and mobile options.
In a similar move, director of WPP CEO Sir Martin Sorrell said in September he would soon spend more than $2.5 billion on advertising from Google, which would make Google its largest advertising partner. (As of now, News Corp is WPP’s largest advertising partner.)
The willingness of agencies and brands to spend high amounts on digital campaigns could be a threat to traditional advertising mediums such as broadcast media’s $205 billion global business. And statistics about consumer engagement point to digital being the next big advertising space. A Facebook-sponsored Nielsen study said that the reach of Facebook was greater than the four major U.S. broadcast channels, especially during the day. Furthermore, the possibility targeting potential viewers has made digital and mobile media more appealing to advertisers. In an AOL-conducted survey of 770 brands, 80% said audience and content targeting were main factors when planning a new video campaign. Online video has grown at a faster pace than other digital advertising channels (28.9% compared to 3.5% according to eMarketer) and much of MediaVest’s investment is based on the perceived potential of digital video.
But perhaps the most convincing reason for why digital advertising spending can surpass television ads is a look at how consumers are spending their time. The average adult in the U.S. spends five hours online (mobile and PC) and four and half hours watching television. Average time spent online is expected to increase 38 minutes each year, and time viewing television is expected to decrease.