By: ProcurementIQ Analyst, Connor DiGregorio
Amid a wild few weeks for the stock market, one of the more surprising developments for investors was the performance of social media stocks. Twitter posted its first ever profitable quarter, and Snap’s share price soared 50% after releasing quarterly earnings that far surpassed analyst estimates. These two companies have been the butt of the joke recently because of their dismal performance in 2017, a record year for the stock market. However, their recent impressive results point to a notable emerging trend—not a trend in teens’ taste for social interaction, as one may expect, but rather a trend in advertising.
The media landscape is in the midst of a revolutionary transformation. Last year marked the first year that digital ad spend was larger than TV ad spend. According to Magna, a subsidiary of Interpublic Group, digital ad spending reached $209 billion worldwide, which totaled 41% of the market, in 2017, while TV brought in $178 billion, or 35% of the market, in the same year. This is as significant of an event as when television first leapfrogged print in advertising decades ago. As the landscape of key advertising markets change, businesses will have to prepare to evolve with them, while prices increase and buyer power drops.