Is ad spending out of line with consumption habits?

Analysis from WARC suggests advertisers are spending too much on social and TV and not enough on podcasts and news sites.

Among WARC’s latest analysis of global advertising trends is the finding that ad spending in both the booming social space and on traditional linear TV may be getting a disproportionate share of budgets when considering the time the average consumer spends with these channels each day.

Looking ahead to 2022, WARC forecasts that social media will account 39.1% of 2022 ad spend, despite having a 21.4% share of daily media consumption. Linear TV is expected to get 31.5% of spending, despite having 16.1% of daily media consumption. That means social media ad spend would need to reduce by $94.3 billion USD globally to reflect global consumption levels next year, with an “investment gap” of $86.9 billion USD for linear TV.

On the flip side, WARC also says podcasts are undervalued as an ad vehicle by $40 billion USD, with online ads on news site undervalued by roughly $45.2 billion USD.

When it comes to who is spending the right amount, investment on online video is now nearly at parity after years of underinvestment.