Invest in Digital Media: Trends, Tools, and Transformations

Key Highlights

• Digital media has evolved from the early days of computing to become a cornerstone of modern society, transforming interactions, democratizing information, and fostering economic growth.
• Tools and software for creating, editing, and distributing digital media content—like graphic design programs, video editing suites, and web development platforms—have become indispensable in the digital media landscape.
• Emerging technologies like AI, machine learning, AR, VR, and data-driven marketing, which promise to create more efficient, personalized, and immersive experiences for consumers and businesses alike are shaping future digital media.
• Investment in companies that counter deep fakes and AI-generated image recognition.

What is Digital Media?

When we talk about digital media, we're diving into a vast, dynamic world that's transforming the way we interact, learn, entertain, and do business. At its core, digital media refers to any information or content that is broadcast to us through a digital device. This includes text, audio, video, and graphics that are viewed or shared through the internet, social media, software, or digital devices such as smartphones, laptops, and tablets. You can discover more on what is digital media by reading our Learn feature.

But let's break it down a bit further. Digital media can be divided into three main types:

• Owned media refers to any web property that a company controls, such as websites, blogs, or social media channels.
• Earned media is essentially online word of mouth, often spread through viral sharing or reviews.
• Paid media, as the name suggests, involves paying to leverage a channel, including paid search, display ads, or sponsored posts.

In essence, digital media has become an integral part of our lives, shaping our communication, learning, entertainment, and business practices. It's a realm that's continuously evolving, driven by technological advancements and users' ever-changing needs and preferences.

What is Digital Media’s Evolution?

Digital media has left an indelible mark on our society and culture, leading to profound changes in various facets of daily life, such as education, entertainment, and publishing. We have witnessed a transition from the industrial age into the information age, with digital media specialists now in high demand to navigate these ongoing transformations.

There’s no doubt that digital media has restructured social interactions, fostering unparalleled connections between individuals and democratizing knowledge. 

Contrary to traditional media forms such as radio and newspapers, digital media is disseminated as digital data. Its accessibility and flexibility enable alterations, but it also raises concerns about the potential emergence of a digital dark age, where older media may become inaccessible on modern systems.

The Internet Revolution

Milestones such as:

• Inception of ARPANET in 1969
• Advent of more potent processors
• Faster memory
• Larger storage devices during the internet revolution

have made a permanent imprint on our society. These advancements have paved the way for online advertising to become a major component of the digital media landscape.

The internet revolution fundamentally altered the methods through which information was exchanged among government researchers, restructuring communication, commerce, and politics. This stimulated economic expansion and harnessed the influence of computing on a global scale, leading to the emergence of the Information Age. Digital platforms played a crucial role in this transformation.

The advent of social media platforms significantly influenced the proliferation of digital media. This created new avenues for media organizations and advertisers to engage directly with audiences, leading to global societal transformations.

How does the Democratization of Mobile Devices and Social Media Platforms Influence Consumer Engagement?

The insatiable global appetite for creating and consuming content, including social media posts, has been revolutionized by mobile devices and social media platforms. They have democratized content creation and consumption, allowing individuals to easily create, share, and access digital media anytime, anywhere. This has had a substantial impact on consumer engagement with brands, providing a platform for users to share their experiences and mention brands in their posts – at least several times per week in the case of influencers (some paid, others not) – thereby playing a crucial role in brand recognition.

By assessing and capitalizing on the emotions that drive their audience’s actions, businesses can use social media to foster more personalized interactions and engage with their audience. Search ads are another digital media tool that businesses can use to target specific audiences and drive traffic to their websites.

In response to the digital age, companies are aggressively distributing content through internet-exclusive channels, bypassing traditional media outlets.

How is Digital Media Applied Across Different Industries?

Digital media is widely used across various industries to enhance outreach to larger audiences, customize campaigns, and assess the effectiveness of strategies. The term “media” refers to various communication channels, including print, broadcast, and digital media, all of which have been transformed by digital technology.

These applications have brought about the emergence of streaming services, user-generated content, and interactive experiences in the entertainment and broadcasting industry. Digital media applications have not only transformed the way we consume entertainment but have also enabled a wider audience to create and share content in a way that has until now been impossible.

Marketing and Advertising

Digital media plays a critical role in the domain of marketing and advertising. It enables businesses to:

• Target specific audiences with personalized messages
• Utilize various media formats for ads
• Foster communication and brand enhancement through social media.

Digital media, especially social media, has revolutionized marketing and advertising by reshaping interactions between individuals and businesses. It has facilitated:

• Customer service
• Product advancement
• Advertising
• Public relations

Consumers and online communities, who serve as advocates and endorsers for particular brands or products, have disrupted the marketing landscape.

From content and social media marketing to email marketing and search engine optimization, digital media has become an integral part of marketing strategies. Understanding the customer, conducting audits and assessments, and utilizing tactics such as SEO and search engine marketing are all part of the digital marketing landscape.

Entertainment and Broadcasting

The entertainment and broadcasting industry has witnessed significant changes due to digital media, altering the ways in which promotional materials are disseminated by studios, how artists interact with their audience, and consumers engage with content. 

In the era of user-generated content, traditional marketing strategies have been disrupted, and the media landscape has been democratized. Entertainment brands are utilizing user-generated content to establish genuine connections with their audiences, expand their reach and visibility, and encourage user participation. This shift has resulted in a more interactive and immersive entertainment experience, highlighting the importance of owned media in today’s marketing landscape.

Prevalent digital content formats in the contemporary entertainment industry include:

• Augmented reality and virtual reality
• Marketing design trends
• Social video platforms
• Short-form video
• Online video platforms
• Multi-faceted digital media campaigns

These formats have changed the way we consume entertainment, making it more engaging and immersive.

Education and E-learning

Digital media has also revolutionized education and e-learning, enabling remote learning, the creation of interactive multimedia content, and the provision of personalized learning experiences. Digital media supports interactive multimedia content in education by offering various media elements to aid learners in comprehending and conveying information, utilizing electronic devices and platforms like social media and mobile phones, and enabling two-way communication through text, audio, video, and animation.

What is the Future of Digital Media Technology?

Advancements in AI and machine learning, augmented and virtual reality, and data-driven marketing and personalization will shape the future of digital media technology. These technologies offer new opportunities and challenges for businesses and consumers alike, promising a future where digital media is more interactive, engaging, and personalized than ever before.

AI and Machine Learning

These will enable more efficient content creation, curation, and distribution, as well as improved user experiences and personalized recommendations.

Machine learning improves content creation by providing personalized and automated content, enhancing efficiency and speed, and powering ROI through advanced analysis such as competitive analysis and market research. AI, on the other hand, enables the simulation of natural intelligence, solving complex problems, reducing tedious tasks, and supporting journalists and entertainment creators to work more efficiently.

Augmented and Virtual Reality

Immersive and interactive digital media experiences will be created by augmented and virtual reality technologies, leading to transformations in industries such as gaming, entertainment, and education.

In the gaming industry, augmented and virtual reality play a crucial role in fostering interactions among players and enhancing engagement with virtual activities. These technologies are popular among gamers and showcase their potential for immersive experiences, paving the way for adoption in other industries.

Data-Driven Marketing and Personalization

Businesses will be able to better understand and target their audiences through data-driven marketing and personalization, resulting in the delivery of more relevant and engaging digital media content. Here are some ways businesses can leverage the power of data to enhance their marketing strategies:

• Sharing data across various channels
• Utilizing demographic data for campaign planning
• Collecting data to guide marketing decisions
• Employing predictive analytics for personalized customer experiences

What is Digital Media's Market Potential?

The global digital media market size was $838 billion in 2022. Some estimates put the size of the market at more than $1.5 trillion by 2028 – a CAGR of 11.27%.¹

The potential for digital media in the market is vast and continually growing. The digital media landscape is a dynamic field, with new technologies and platforms emerging regularly. This constant evolution creates an environment ripe for innovation and growth.

As more people around the world gain access to the internet and digital devices, the audience for digital media expands. This global audience provides a substantial market for businesses and creators to tap into, offering a wide range of opportunities for those who can effectively leverage digital media tools.

Furthermore, the rise of data analytics and targeted advertising has allowed businesses to reach their desired audience more effectively than ever before. By utilizing digital media, businesses can tailor their messaging and address their content to specific demographic groups, increasing engagement and conversion rates.

In addition, the growing popularity of social media platforms has created new avenues for content distribution and audience engagement. These platforms have become a critical part of many people's daily lives, providing businesses with a direct line to their audience.

Overall, the market potential for digital media is immense and shows no signs of slowing down. As technology continues to advance, the opportunities for growth and innovation in the digital media landscape will only increase.

What are the Drivers and Risks of Investing in Digital Media?

Investing in digital media, like any other investment, comes with its share of risks and rewards. The dynamic nature of the digital media landscape, with its constant technological advancements and changing user preferences, presents both opportunities and challenges for investors.

On the driver side, the global digital media market is growing at a rapid pace, providing a vast pool of opportunities for businesses and creators. The rise of social media platforms, data analytics, and targeted advertising has opened new avenues for content distribution and audience engagement. Businesses that can effectively leverage these digital media tools can reach a wider audience, increase engagement, and boost conversion rates.

One of the other facets of digital media – and it arguably sits in a gray area between a driver and a risk – is the preponderance of deep fakes, as well as the continuous battle over mis- and disinformation. Never before have so many people had the tools to so quickly create what appears to be legitimate content - including Artificial Intelligence image creation and voice recognition – for which its use is unclear. Startups that exist to counter this potential misuse of the technology can clearly be a driver of investment. 

However, investing in digital media also comes with certain risks. The digital media industry is highly competitive, with new technologies and platforms emerging regularly. Keeping up with these changes requires continuous learning and adaptation. 

Additionally, the reliance on data for targeted advertising raises concerns about data privacy and security.

While investing in digital media offers significant potential for growth and innovation, it also requires a careful assessment of the associated risks. Therefore, investors must stay informed about the latest trends and developments in the digital media landscape, and make informed decisions based on their risk tolerance and investment goals.

How to Invest in Digital Media with OurCrowd

If you are considering investing in digital media companies, then OurCrowd can help you.

All startups we support have undergone thorough due diligence to ensure their reliability and potential. Browse through our selection of digital media companies and find new, exciting investment opportunities for further portfolio diversification.

Two previously funded portfolio companies include:

• BIScience, a digital advertising, business, behavioral and competitive intelligence platform that provides insights into hundreds of international brands, Fortune 500 firms, and global digital marketing and market research firms.
• TubiTV, an advertising platform to help monetize streaming content by creating the most extensive ad-supported content library in the world.

Investing in digital media stocks through OurCrowd is really quite straightforward . All it takes is following a few simple steps:

1. Register for a free investor account and join OurCrowd
2. Browse through the digital media private investment opportunities
3. Review the provided company information to determine whether you want to invest in a particular digital media company
4. Transfer money to your account and make an investment
5. Get performance updates on your portfolio every quarter.

Join OurCrowd to create a free investor account.

1. https://www.businessresearchinsights.com/market-reports/digital-media-market-105383