Print, TV Losses Proving to Become Internet Advertising's Gains

A couple of posts and reports to brighten up any web entrepreneur’s day:

Tech Crunch captures a couple of highlights from the IAB’s latest report:

• Internet advertising in the U.S. grew 10.6%, or $6.1 billion, to $23.4 billion. The $6.1 billion fourth quarter (up 2.6 percent) was the first time Internet advertising surpassed the $6 billion mark.
• If you nuke total television advertising into sub-parts, then the Web is already kicking TV’s butt:

The IAB also trotted out some numbers showing that Internet advertising revenues are outpacing TV advertising by some measures. The $23.4 billion in annual internet advertising spending exceeded advertising on cable TV for the first time (which was $21.4 billion), and took the No. 3 spot behind national and local TV ads ($29.8 billion) and newspaper ads ($34.4 billion).

That might be a bit unfair, because the same treatment should see online advertising broken up between “local, national and global campaigns” or at least broken up by “search vs. display” for example. But this is Tech Crunch reporting on IAB’s findings which means we’re all biased to ham up the figures. But nonetheless, the graph looks nice, doesn’t it?

Any way you dice it though, the losses to TV and print are turning into gains for the Web, from Paid Content:

How bad can it get for TV and radio broadcasting? How about revenue declines for at least the next five years? That’s what a new report being released today by SNL Kagan predicts. Following revenue declines of 10 percent and 7 percent for radio and TV, respectively, in last year, Kagan predicts accelerated declines of 15 percent for both this year. That number will stabilize somewhat after 2009, but Kagan forecasts annual declines of about 2 percent for radio and TV for five years starting in 2010.

I’ve yet to figure out an eloquent way to put this, but I find broadband media is so “explosive” (compared to just text media, basically) that when it’s said and done, what will happen to TV/Cable as a result of the Web will make what happened to newspapers a pleasure. What exasperates this is XML and RSS, which allow for so many distribution and syndication opportunities. If the Web 1.0 crowd had RSS to leverage, I think the Web would have grown even faster.

Imagine how quickly the Web would be growing after its first 14 years, then, relative to traditional media:

And in a new analysis comparing the first 14 years of Internet advertising revenues to the the first 14 years of cable and broadcast TV advertising, the IAB found that Internet advertising surpassed cable TV advertising in Year 4 ($907 million versus $499 million) and broadcast TV advertising in Year 10 ($9.6 billion versus $8.9 billion). Now, in Year 14, Internet advertising is almost twice as large as broadcast TV advertising was in its 14th year ($13.3 billion) and nearly four times as large as cable TV ($6.5 billion).

That’s great news.

Though when you consider how large total advertising is today relative to how small it was when radio or television launched, you do have to take this with a grain of salt.

Comments

[pacman1947:]

Your analysis seems to be essentially accurate. With a potential across all nations, languages, and cultures, the internet as a commercial marketplace has virtually no limits. The Dot Bomb era actually had a reasonable premise -- unlimited market potential. All that remains is a good business model to make money, and the business can grow to its logical limits of a seven billion person place of business.

Mar 31 08:21 AM

[Mad Hedge F...:]

Reality is a bitch! The migration of American business to online formats is accelerating, with over 1,000 new business being created every day. Internet advertising continues to go from strength to strength, and is one of the few growth sectors of the economy. The Interactive Advertising Bureau reported that online advertising grew 10.6% last year to $23.4 billion in a year when the total advertising market shrank from $132 billion to $125 billion. It now ranks as the third largest ad distributor in the US, after newspapers ($34.4 billion) and TV ($28.8 billion). Search advertising dominated, with 45% of the total. Video adverting was the fastest growing sector, up 123%. Display advertising managed 8% growth, even after the collapsing economy caused a very week fourth quarter.

Mar 31 12:38 PM