FRANKFURT (Reuters) – Spending on digital marketing grew by 44 percent last year in the United States and Britain to $52 billion, a study has found, estimating that global outlays on such tactics are approaching $100 billion.
In contrast to placing online ads through intermediaries, digital marketing, or “martech”, has the appeal of enabling brands to target consumers directly via social media, search-engine optimisation or voice-activated assistants, such as Amazon’s <AMZN.O> Alexa. The growth in part reflects a desire to take functions in house following high-profile complaints by consumer giants Procter & Gamble <PG.N> and Unilever <UNc.AS> over fraud in online advertising.
The issue of ‘brand safety’, which can be jeopardised when ads appear next to unsuitable online content, has also frustrated marketers and encouraged them to seek greater control over how they target audiences. “Clearly marketers are seeking to build in-house strength and are set to spend more on martech to remain competitive,” said study author Damian Ryan, a partner at UK accountancy firm Moore Stephens. “Our research finds that this budget is coming from media spend and will have a resounding impact on the value of media-centric agencies,” he added, referring to traditional ad agencies that are struggling to adapt to the digital era.