Multimedia is the field relating to the computer-controlled integration of text, graphics, drawings, still and moving images (video), animation, audio, and any other media where every type of information can be represented, stored, transmitted and processed digitally. Multimedia has played an important role in the rapidly growing technological advancement on a global level. Some of the sectors that incorporate multimedia technology:  

Nearly all industries use the versatility of multimedia technology in order to achieve a greater potential in the sector. In this era of technological revolution, where a gadget is employed for every area of life, multimedia advertising has taken over pen and paper by storm.

Multimedia advertising (“ads” or “ad”) is the process of using animation and graphic design to market and sell a product or service, due to its sensory (visual, audio etc.) appeal. Companies are likely to stand out to a broader audience and increase sales through search engine optimization, extensive keyword research, and strategic linking. 

 

Examples of ads using multimedia for message deliverance:

 

Advertising on a Global Platform

Spending on media continues to shift from traditional to digital products and services at a rapid pace. By 2019, we believe digital spending will account for more than 50% of overall media spend. Within this, digital video spending will overtake physical spending by 2018, two years earlier than we had previously forecast. Digital, consisting of Internet and mobile ads, will become the largest ad category by 2017, surpassing TV one year earlier than forecast, and mobile will more than double its share of the digital ad market. 

This rapid digital shift is being driven in part by the growing number of connected consumers, the expansion of mobile telephony, and elevated mobile broadband adoption. As it continues, it will not only expand the digital share of the media wallet but have a structural effect on almost all media sub-sectors, redefining business models. 

The growth of multimedia can be directly related to the growth of smart devices and web usage. Smart devices are directly connected to the web where vast information can be extracted. Mobile devices’ share of web traffic is up 30% year-on-year, with the majority of this increase coming from the world’s developing economies. 

Digital giants are increasingly dominating the global ad and multimedia market. In the year 2015, famous names like Google, Facebook, Baidu, Yahoo, and Microsoft accounted for 19% of all the global multimedia and advertisement spend flowing through all media, according to media agency Zenith Optimedia’s 2016 “Top Thirty Global Media Owners” report. 

For consumer spending as a whole, multimedia and digital components rose by 11.2% in 2014 and accounted for 46.2% of the market. Traditional components of the market increased by only 1% in 2014. We project digital consumer spending to continue to be the principal market driver, increasing by a projected 8.6% compounded annually to 2019, compared with a 1.3% projected CAGR for traditional consumer spending. As a result, digital consumer spending will overtake traditional consumer spending in 2017 and will generate 55% of total consumer spending by 2019. 

Digital ads were the fastest-growing category in 2014, with a 16.1% increase, followed by video games at 14.3% and broadband at 9.2%. This pattern reflects the underlying transition of the market from traditional to digital media. At the other end of the growth spectrum, consumer magazines and newspaper publishing continued to decline in 2014. Digital ads, video games, and broadband are forecast to continue to be the fastest-growing segments over the next 5 years, with projected compound annual increases to 2019 of 12.7%, 8.1%, and 7.8%, respectively. 

 

Advertising and Economic Forecast

According to the Business Insider, digital ads are forecast to grow to US Dollars (“USD”) 240 billion in 2019 having a compound annual growth rate (“CAGR”) from 2014 of 12.1%.

Multimedia ads have grown parallel to the rise of the internet revolution, smartphone penetration, and its increased affordability. The internet has created a generation of consumers that seek instant gratification which brings us to instant, on-demand goods and services in the palm of our hands. Thus, global online ad revenues are expected to exceed USD 190 billion by the end of 2017 due to the growth of mobile ads and will be surpassing the conventional television ads to become the largest ad category globally. Predictions show that high demand for video, social, and Internet search subcategories will result in compounded annual ad revenue growth in the mid-teens percentage area and lead to online ads accounting for about half of global ad sales by 2020.

More than half of the world’s population is on the live web, while 66% of the population owns a mobile device, these numbers will constantly grow as we see a quarterly growth of 1% in internet users and unique mobile users, while a 6% growth is seen in active mobile social users. Naturally, with the emergence of competitive mobile data plans and affordable smartphones, mobile users will continue to rise, resulting in the rise of ads using multimedia technology.

 

Advertising and Economic Forecast

Digital ad spend is growing rapidly and gaining in popularity over traditional marketing means. According to PWC’s Internet Advertising report, global internet and digital ad spend is forecast to grow at a compound annual growth rate (“CAGR”) of 11% over the period between 2015 to 2020; from USD 154 billion in 2015 to USD 260 billion in 2020. Digital ad spend will likely pass a major tipping-point when it exceeds global TV ads for the first time. 

In the first 6 months of 2016, internet and digital ads recorded an all-time high, reaching USD 32.7 billion. Mobile ad revenue increased by over 89% representing 47% of total internet revenue. According to Mary Meeker, concentrated growth of digital ads came from Facebook and Google by 62% and 20% respectively. These giants are expected to take a 61% slice of the total digital ad revenue by 2018.

Another shift in the multimedia ad paradigm would be the emergence of virtual reality (“VR”) and augmented reality (“AR”). VR lets viewers be active participants in a virtually created dimension. Rather than conventional media ads, advertisers have to go an extra mile to build entire worlds. This makes VR and 360-degree video an incredibly powerful tool to create empathy. The consumer or viewer is given a greater sense of the full picture. Ads become more impactful. Using VR videos as a powerful tool, big brands are capturing their way in the market. Recently, BMW used this technology for an ad featuring a 360-degree car race while AT&T simulated a car crash to drive home its phone safety message.

  

Challenges

  • Talent access to technology and a ‘change the world’ attitude are allowing start-ups to bloom across the world, creating new businesses and lean models. Once this breed of company reaches scale, it invests both in raising the quality of its content and in offering new services, putting competitive pressure on traditional companies.
  • As a growing number of younger users flood to channels run by amateur content creators and smart ad tactics, such as product video blogging on YouTube, which has grown to have millions of subscribers and followers. These bloggers have developed a new kind of relationship with their audience, building up a dialog with fans and name-checking them in videos. This makes content or product reach a big competition with more matured and experienced corporations.
  • Consumers appreciate having someone to curate content for them, which is close to what an editor would do with a magazine. Clean mobile reading experiences and native ad platforms are reaching new and savvy audiences, enhancing the user experience and allowing publishers to charge a premium to advertisers.
  • Consumers are becoming increasingly aware that their daily lives are being turned into data that can be analyzed and monetized by third parties. Opaque and complicated privacy policies and customization algorithms may prompt consumers to switch to services that offer them more transparency and better data privacy. However, with the presence of digital hackers, any saved information (such as auto-fill forms and passwords) are easily exploited and taken advantage of.
  • A diverse set of brands and organizations now assume the role of broadcasters competing for consumer attention. This is because everyone has turned to content creation and amateur product ads making competition soar high.
  • Advertisement blocker (“ad blocker”) is an extension that filters content (typically ads) to reach the end user. Ad blocker usage rose to 30% in 2016. There were 615 million devices blocking ads globally in 2016, while 62% of those came from mobile. Desktop ad blocker usage increased by 17% year-on-year to 236 million. 74% of users have claimed that they abandoned the websites rather than performing the extra steps required to whitelist them. The largest geographical driver of mobile ad blocker use has been in the Asia-Pacific, where 94% of mobile ad blocking takes place.

 

Going forward, the industry will certainly come across big challenges in fulfilling the full potential of mobile ads. While the opportunity to communicate directly with consumers through their own personal devices remains important, there still remain ways that ads can continue to break through technology barriers.

The shift of paid search from wired access (via laptops and PCs) to mobile means search will be the largest single component of mobile Internet ads in the next five years, projected to grow at a CAGR of 17.7% which underlines the leading role of the tech giants in capturing the overall growth. In a growing world of modern technology and consumer expectations, it is forecast that multimedia ads will continue to thrive globally. But there remain pockets of hot growth to aim for – and potential pitfalls along the way to be wary of.