The top 100 advertisers in the U.S., who represent 41 percent of total advertising spending, shifted about $1 billion last year from TV and newspapers to the Web. An analysis from Ad Age shows that overall media spending in “measured” categories (TV, print, radio, Web) by the top 100 advertisers was flat in 2007, with 0.3 percent growth to $61.3 billion. But spending on Web display ads rose 33 percent to $4.2 billion. The article notes:
Put another way, these top-tier marketers increased measured internet spending by $1 billion; slashed newspaper spending by $674 million; and cut TV budgets by $406 million.
This is yet one more piece of evidence that dollars are flowing from traditional media to the Web. The analysis is based on data from TNS Media Intelligence for 2007. TNS only measures display advertising, and not search.
The big question is whether the recession that has already hit some categories of advertising will hit the Web this year. Already, the growth of spending in display advertising slowed overall in the first quarter of 2008. And the Interactive Advertising Bureau showed a slight decline for all Web advertising (including search) to $5.8 billion in the first quarter, from $5.9 billion in the fourth quarter of last year.
Here is a table from Ad Age showing the breakdown in spending for the top 100 advertisers (the $44 billion in “unmeasured spending” includes things like direct marketing, in-store advertising, and other promotions, and is not included in the figures cited above):
wow i am surprise that newspaper’s get the amount of money for ad’s as they have by these figures
do folks still read newspapers?
I love that magazine spending is still nearly 3x online spending. It’s a terrific reminder of how many opportunities there are out there in industries so many dismiss out of hand as dead or dying.
It’s about bloody time. No love lost here for old media.
@Erick – Thanks for the good news!
It’s indeed very good news for web companies/startups/SN/etc .. More money flowing into the web means more fuel for growth.
I believe this will be a growing trend as more and more mainstream media are converging their platforms with the Web. This makes sense as Internet users are increasing, doing business online becomes more cost-efficient, and the advantages of being accessible anytime, anywhere (this never gets old).
I don’t see why the Internet/Web is going down or anywhere boring. It’s here to stay and it’s just going to get more exciting in the coming years.
Thanks for the brilliant article!
Best regards,
Darren Lee
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These are some great stats. Im going to have to talk about them on http://crenk.com. It is good to see internet advertising growing, but really shouldnt it be growing at a more rapid pace?
The computer is going to knock both the newspaper and television advertising out over the next decade. KO! Realview TV is leading the way. Like Redgate Communication did for AOL, Realview TV will due for a major video powerhouse. Realview TV (http://www.realviewtv.com) – new media agency focused on interactive video, series A, already profitably.
The company is the agency of choice for medium and fortune 500 companies who want to leverage the power of broadband tv advertising with the interactivity of the web. Companies are building their own TV channels online. Partnerships with major universities as well as car manufacturers will be announced in 2008, 4th quarter. Realview TV handles everything from scripting to syndication/seo. Video killed the radio, now its going to kill TV and newspaper star as well.
The Internet has crushed yellow pages, newspapers, magazines, etc. It’s the old domino effect!
The Internet Rules and the rest of Media drools!
Darin
ho hum ho hum
Darin
I don’t know what pie chart you are looking at, but the one on my screen shows:
Internet 7.9%
vs. Network TV 17.1%
vs. Newspaper18.9%
vs. Magazine 20.4%
All f which are still more than double internet ad spending.
People in the Valley easily forget that the rest of the world ticks a tat slower in terms of technology (and social media) adoption. Although everyone is going ‘crazy’ in California the Groundswell (did you read the book?) hasn’t crossed the chasm yet. Still those numbers are impressive. Thanks to TC for digging this out.
This shift in advertising from other mediums to Web is one of the main reason for tension between Microsoft, Google and Yahoo.
Everyone wants to grab a bigger pie of the billions of dollars that are going to be pushed into Online advertising every year.
Erick – Thanks for an excellent piece information.
Frank: It’s the percentage of growth that you should traditional media concerned. According to the 2007 figures, Internet was up almost 16% while Newspaper was down more than 5%.
i think this is logical to a certain extend .. newspapers are there for more than 100 years and everyone knows them.. its a typical target for ads .. same goes to TV ..
magazines hold this percentage because of their audience… they tend to be more specialized (technology advertisers target technology magazines because they can reach people interested in technology) .. and the internet is a relatively new media compared to both.. but has the potential .. especially that you can track you ads on the internet .. while its difficult using other medias … plus you can reach more people… become more specialized .. etc
its a matter of time .. and as Steve Ballmer said that by 10 years, paper magazines & newspapers might disappear.
This isn’t all that surprising. Online advertising provides much more robust metrics and therefore can report an actual ROI. No matter how many magazine ads you have, you will basically never know if any of them converted.
I don’t see such a big deal here. Internet went from 3% to 4% of advertising? I’m still amazed it’s so low. Even if it keeps growing at 25% per year, it will still take nearly a decade to get to where television is. And by then, the television and the internet will be the same thing anyways.
Really interesting to see that magazines and newspapers still dominate ad spending. I would assume however that most of these dollars were targeted at middle America (drink more Bud etc). What I’d like to see is this change in Ad spend in particular verticals such as computer hardware, software etc. I think that those results would show an even greater shift away from the old media model.
Newspaper ads are crazy… but you can sometimes find gems. We advertise in a local business publication put on by the paper. It is inherent in the internet, but targeting is so important.
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Moving money from print to online is a slamdunk. I think the biggest obstacle from it happening more quickly is that online is very measurable and print is not measurable at all so it is hard to say online is performing better…
Magazines? How many people subscribe to magazines still?
There will be nothing more ‘measurable’ than an intent driven and location-specific ad delivered to the mobile device while the user is on location. I think the next few years could potentially open up a new ‘medium’ not listed in the above categories. That is telephony based ads specific to local information – a combination of push and pull local mobile ads in voice form. At GeoGraffiti we call them Voice Marks and Biz Marks. The success of iphone3G and Android platform will of course be critical to breaking the current wireless carrier barriers and making this a reality. Only time will tell, but go Mobile 2.0!
@Jeremy…
Don’t confuse the price, and value issues with total dollar spending. Page inventory count at magazines are WAY down — witness how many mags have folded in recent years. Tech magazines in particular were the “canary in the coal mine”, in their advertisers & audience were both savvy enough and most definitely online. A good chunk of advertising will continue to move out of magazines, though they will *always* be the best spot for expensive branding campaigns (think perfume & clothing ads, though many others fall into this mix).
Interesting, the fact that magazines get so much (3x) more than online advertisement is impressive. This tells us that either the ad agencies don’t trust the internet as a way to advertise or that the right tools aren’t there.
But there’s a fight going on between online advertisers and ad-blockers. More people are installing ad-blockers that completely wipe out a website’s advertisement. This might be one of the reasons on why online advertisement hasn’t taken over all of the “old media”.
Has anyone come across anything showing a similar trend in International markets?
@Chad, You put ads on my cell phone and I will hunt you down like a dog
k?
@George, Please make me an adblockPlus for my cellphone/SMS, thnx.
One thing that isn’t mentioned that I’d like to know is how many eyeballs does $1 in each of the categories get you? Is internet advertising lower because it’s cheaper per eyeball? I don’t know figures, but I’m assuming that an ad online has a lower cost than a commercial on TV. I’m also assuming that these numbers were taken from the entire total expense companies paid for advertising, which would include the production of commercials, design/drawing of newspaper ads, etc. So it would be nice to find out what the average cost per eyeball is when they factor everything in.
The internet still might be too costly from a budget standpoint because they have to advertise in so many different locations to reach the same number of eyeballs for their target audience. Where as if they want to advertise to New York City residence who are interested sports they can take an ad in the NY Post’s Sport pages and cover a large percentage of that demographic.
I think alltop.com might have the right idea… bring all these smaller sites back into one place so it’s more like choosing selecting a channel on TV and having numerous different shows to see. I hate to use such an old phrase, but it looks like a “web portal” is what we might need to make money… maybe we should start calling them “iChannels” or something.
Phil #24,
LOL! I hear you. Don’t worry though. I’m going to do something even better. I’m going to let the “community” put ads on your cell phone … but you are going to love them and want them
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This doesn’t look right. $106B only? Too low! Wher is the yellow pages?
Great post Erick. I don’t find the figures that surprising – whilst there’s still a place for traditional media in context, in my view advertising on the web can allow you to be much more specific in your approach. I think that we’re really lucky to be in a position where we’re so clued up with the possibilities in the industry and that can only stand us in good stead when the more “traditional” companies catch up!
Unlike Magazines, the internet will have a much more detailed targetted audience than ads in newpapers. On the same site, you can have no 2 same ads or the two people.
Contrary to your conclusions there is no evidence where the ad money from newspapers and Network TV is flowing. Definitely (a large) part of it will go online. But not all, as you can see syndicated TV and Cable TV networks are growing as well. Undoubtedly part of the losses in Network TV and Spot TV is going there.
And magazines and outdoor are growing as well. They are all “old media”. And then also parts of the ad budgets will flow to “unmeasured”.
So, yes there is unmistakingly a huge growth in Web advertising but then it still has a way to go as it is “only” 7% of total ad spend at the moment, which can easily become 15% in the future.
@eric: internationally the same trends. In certain European countries the web advertising spend as % of total is already over 15%. Main losers there are newspapers, cinema, radio and network TV
Consumers will keep finding ways to stay in control with web-based ads even more than they have gotten used to doing with hard-copy ads for brick and mortar vendors. They’re also becoming as savvy about online hucksters as with traditional scammers.
As a former community newspaper editor and magazine journalist, I’m interested in what’s coming in the next year or two. Since advertising drives all of these industries, what do these trends suggest about the possible future of Web 2.0?
@eric – figures for international markets.
The UK is way ahead in terms of ad spend moving online.
There are predictions coming out now that the Internet will overtake TV as the biggest advertising platform.
Most of it is going to Google and search, but the rapidly increasing popularity of online video is also beginning to have an impact.
At Futurescape, we analyze the American and British Web show markets and note that Bebo in particular keeps commissioning Web shows with major advertisers attached as sponsors.
More here: http://www.futurescape.co.uk
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Internet marketing is sure getting popular =D
internet ad increase so quickly, ,maybe it will dominate the ad market. it can calculate ad effect , and reduce wasting money
This is all good for the power players. Do we not have to recognize, the up and coming beginners? They are the ones that are the food for the almighty advertising giant’s. It is to difficult for them to find a real place to advertise their businesses with little income or knowledge. Oh you say free classified adds and social networking. Yes this may bring in a few people. If you can get your advertisement seen! I say make a way for publishers to add their banners or advertisement, big gun’s.Have them put your company on their web site’s in trade. If your in the top100 advertisers would it not benefit you to be on more web sites in the world? You must reach out to Grow in 2010. I’m not saying to give up your income from advertising. I’m saying come up with a way to help the less fortunate then yourselves.
Create a web site that if publishers follow your guide line’s. They can have their adds seen by millions through your true company. For the life of your add remaining on their sites. Allow a first page upgrade for your income growth.
In doing so you will have them as customers for life. Good luck to you all that are in this crazy business. I personally need to succeed to accomplish my Goal’s. Visit:
http://www.expe...ighway.webs.com
Any good Ideas are welcome Jeff Burch