The big digital brands are losing business and the companies are being squeezed, as companies move to adopt new platforms to target audiences and gain more advertising dollars, according to a new report by network marketing agency Ringana Network Marketing.
The report, which was released Monday, was written by Ringana co-founder and chief executive, Michael D. Miller.
“As consumers become more digitally savvy and increasingly interested in the products and services they buy, brands need to respond,” Miller wrote.
“The more brands have to compete, the less business they have.”
The study found that companies are losing about $100 million per month in digital ad revenue.
“We saw that when the average digital ad spend was $2.2 million per day, which is about 5 percent of their ad spend, brand advertising revenue fell by $4.4 million per year in 2019,” Miller said.
“And that was just one of the ways that brands were losing their digital ad business.”
The report also found that digital ad spending has been falling for several years.
The last two quarters were the lowest since 2016, and digital ad ad spending fell for six of the last seven quarters, according the report.
It also found digital advertising revenues fell for the second straight year.
Miller said digital ad revenues will be at the same level next year.
“In 2019, brands will be spending $1.6 billion per day on digital ad campaigns,” Miller explained.
“That will be about $150 million per hour.
So, they still have a lot of money on the table.” “
But if you’re an average brand, they’re still going to spend about $2 million on digital ads per day.
So, they still have a lot of money on the table.”
The problem is, there are more people buying digital than there are brands, Miller said, adding that brands are going to be losing a lot more money in 2019 than they were last year.
The industry is shifting towards digital ad dollars, Miller added, because advertisers are seeing their spending on digital advertising to be much higher than it was in the past.
The problem, Miller noted, is that brands aren’t spending as much on their digital campaigns as they were before, especially since the market is shifting toward digital.
Brand spending is the key to keeping their business alive.
“Brand spending has dropped by nearly $30 million in 2019 compared to 2018, which has driven many brands to focus more on digital-only ad campaigns than they used to,” Miller noted.
“But as brands increasingly use social media to promote their brands, it’s a trend that we’re seeing in which brands are increasingly trying to monetize through digital and social,” Miller continued.
“Now, we’re also seeing brands increasingly turning to other platforms to promote and engage with their brands.”
Brand ad spending, Miller concluded, is a “big deal” for many companies.
A brand can lose as much as $150 to $250 million in digital advertising revenue per month, according Miller, who said that this is a trend the industry is beginning to notice.
“There is a sense among companies that brands and brands will not be able to survive,” Miller stated.
According to the report, brands that focus on social media advertising and engagement are losing more and more money.
Miller said that in the first quarter of 2020, companies that focus more exclusively on social advertising and engage on social were losing about 30 percent of digital ad sales to those that only engage with social media.
This is a huge problem for brands, and it’s an industry that is already in trouble, Miller pointed out.
If brands can’t afford to spend money on digital, they will stop spending on traditional advertising, Miller explained, which will lead to less money being spent on advertising.
“It’s like a snowball effect,” Miller told Bleacher Sports.
“When brands can no longer afford to advertise, they stop spending money on traditional ads.
So the next time you’re out with a client, say, say on Instagram or Facebook, stop buying it.”
Miller warned that brands that are losing money on social ads, will be losing money when they have to do advertising on other platforms.
Ringana will help companies in this transition by providing services like digital marketing, advertising and branding, according a press release.
“Ringana’s team of network marketers, social media experts, and experts in digital marketing and advertising has developed comprehensive online marketing and digital marketing platforms to help you make the most of the digital opportunities around you,” the press release stated.
“From creating targeted and engaging content that will drive sales and engagement to marketing campaigns that leverage your brand’s unique brand identity, Ringana is your trusted advisor for digital marketing.”
Ringanas report said that the biggest digital marketplaces are: Facebook, Instagram, Twitter, Google and YouTube, according and a few others.
It also noted that the big digital marketplace is in China, but that is growing.