Investing in Small Digital Ad Groups – How Safe is Your Money?
Over the last year, a number of digital advertising companies floated on the London Stock Market, creating an investment of more than £200m for financiers who have been charmed by the increased growth in business.
However, this idea of putting money into the lucrative digital market has backfired on some investors because of the unpredictability of the digital economy.
At the moment, backing any digital company is precarious because of the nature of the digital business. Two companies, Matomy Media and Marimedia, have declared profit warnings in recent times, saying that their share prices will decline. This is just one example of how investing in the ever-changing online business of advertising is an uncertain one. This stark reality for opportunist investors has highlighted how unsafe their money actually is.
However, a recent article by Newsvend suggests that the financial market will be looking to invest in paid digital advertising over the next five years, according to a new report from the eMarketer.
Businesses will allocate an 11.7 percent budget for research on digital advertising according to Duke University, which published a survey of 288 marketing heads of department. This is due to a forecast that the growth rate between 2014 and 2018 will improve for the sector. Companies have understood that they need to spend in digital advertising at a time when US financial institutions are embracing the progress made in the field of multi-channel marketing.
By 2019, eMarketer has predicted that the financial industry within the US will have spent over $10 billion annually on advertising through digital services. Data from last year has seen a large decrease in the use of conventional advertising channels, with television budgets dropping drastically over the past few years.
eMarketer has also suggested the importance of mobile users. There are a lot more consumers using their mobile devices for the internet and their online accounts. The financial sector is keen to invest money into this area, and in particular that of mobile displays, mobile search functionality, mobile video, and mobile media. One thing for certain though is that the digital age is now omnipresent within society. It is also clear how dramatically advertising has changed over the last ten years. This transformation has been a precarious one for the newspaper industry with regards to creating revenues, but, as always within the world of business, to succeed they must adapt to the ever-changing market.
So it would seem that some sound advice to those looking at investing in digital ad groups would be to do your research into a particular company before putting capital into it. The digital world is evolving at a frantic pace and what works successfully in advertising one day can change quickly into a tired formula.
Global Seven News