Do not be confused … this is the RISE of Digital!

A few bits and pieces of data are flowing through which are sending some strong messages about the state of advertising industry, and it concerns me that the topline stories are clouding the truth about what is happening in digital.

The first of these are the PWC/IAB Statistics which came through on Monday. Journalists were quick to jump on the opportunity to sprout the “gloom and doom” angles, but few took the opportunity to look at the deeper trends.

I’ll put aside my usual bugbear of the behaviours of statistics growing off a low base – too much time is spent discussing the percentage changes in the levels of online advertising, while ignoring the nominal (i.e. the amount of dollars, measured as dollars) growth over the period. The press release for the report clearly highlights that online advertising when compared to the same quarter last year was up 14%, despite the revenue numbers being down by 5% when compared to the last quarter last year. That change was an nominal increase of $60 million for the quarter – not bad by anyone’s measure.

Any fool could expect to see a drop in the topline numbers. The first quarter of the year is a tricky quarter for most industries; it is short, chock-full-o public and school holidays and in my experience, is influenced by the annual post-Christmas/Summer Holidays malaise which stops many industries from hitting full throttle until at least sometime in February. Add a global downturn, general uncertainty and the collapse of some high-profile, agressively marketing companies (Such as Storm Financial, ABC Learning , Nylex,  and others) and near dead stop sales cycles for industries like the Automotive industry, and you can expect to see the numbers show a slowdown.

US Advertising Spending Growth - Source: eMarketer.com

Being the perennial ‘digital believer’ I think it is important to look behind the gloss and fluster and spend some time looking what these various statistics are telling us.

eMarketer.com sent a salient measure of the state of the overall advertising industry in their daily update today. Inside some absolutely abysmal statsitics for the overall advertising industry in the US, are clear signs of the structural shift to digital. Of around twenty categories mentioned, only Spanish Language Magazines, something called FSIs (I’m guessing Free Standing Inserts, or as we simple Aussies call them … catalogues) and Online Display Advertising showed signs of growth ….. (and maybe it is Spanish Language Magazines about online avdertising which is driving that category??). I have been saying for a while now that I believe that this recession will be the event which finally establishes digital as the core of customer engagement – marketing, advertising and customer service and that just about everything else will be derivative on the digital strategy. We are witnessing the rise of digital.

OK, sure such motherhood statements ignore some segments of commerce – my local cafe and dry cleaner don’t need elaborate digital strategies (other than to be sure they think about what their customers say about them!), but for most medium to larger companies, this is certainly true.

Early next week, we will be releasing the AIMIA Digital Services Index Online Survey report for 2009 and being heavily involved in the preparation of that report, I can give a hint that more about this structural change is coming through in those statistics. I can also tell you that the sorts of opportunities we are seeing emerge in the digital services space support the assertion that the commercial approach to digital is becoming more significant, more integrated to the business and more strategically important.

I’ll blog a little more over coming weeks about what I think this means….