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Online Advertising Eating Traditional Pie

September 03, 2008

Posted by: Keith Betz in Online

If I told you that online ad spending was growing, you probably wouldn’t be surprised. After all, as increased online consumer usage continues to foster the growth of this medium, the advertising budgets allocated to it will likely follow suit. What IS surprising is where the advertising budgets helping to fuel this spending growth come from. According to the IDC, as much as 95% of this growth comes from money that has been spent in other media before. That’s a staggering number. But whose budget pie is online eating?

ADWEEK recently reported total broadcast TV ad spending was down 4%, combined local and national spot radio down 7%, and most newspapers ad sales down between 10%-25% in 2008. Add to that the increasing popularity of DVR’s, satellite radio and decreasing newspaper circulations, and it’s easy to see the writing on the wall. These traditional media outlets are scrambling to stop the bleeding and figure out how to keep their share of the pie.

In contrast, online is poised for double-digit ad revenue growth in 2009. Why? Because advertisers, including our own clients, want the measurable results that online delivers. In addition, its reach and targetability are continually expanding, something traditional media simply cannot boast. The budget shift toward online can also serve as a useful reminder. Like most things in this world, consumer media consumption is continually evolving and shifting. A strategy that you successfully employed a year or two ago might not produce the same results now or in the future. It’s this type of thinking that drives us to continually monitor those changes in lifestyle and media habits in an effort to keep an advertisers strategy evolving and shifting as well.