An interesting article in the Washington Post this morning on the demise of the 30 second ad. Frankly, I’m not one to think that TV, print and radio is about to flatline in favor of the Web, though I think that all three media need to get with the program and realize that the Web will be the platform that will intermediate most of the transactions and communications regardless of the media.
I was about to write a post saying that ad agencies won’t disappear, much the same way that media companies did not disappear, they simply began to adjust and acquire to position themselves for a digital 21st century. To make my point, I started to think of numbers than can reinforce this.
But then as the article was throwing around a lot of widely-known stats, I fired up Excel and a few things stood out.
According to a very basic financial model using the growth rates, the advertising on the Web will surpass TV.
Mind you, earlier this year I posted 2020: Online US Ad market to be a $100B market. That was a basic model whereby all US advertising grew at 2.5% per annum with online ads growing a constant 25% until 2013, when online advertising grabs 25% of all advertising. The reason I stopped the growth model at 25% was simply because people spend 25% of their times online, so until this equilibrium is reached, it could be argued that online will continue to win points at the expense of radio, TV and print.
Today’s WP article highlights the stats for our latest model, and as a Web entrepreneur, I took a cold shower and went for a jog before posting.
A key passage:
The signs of change are seen in dollars. In 2006, network television advertising revenue increased 2 percent while Internet ad spending rose 35 percent, the Interactive Advertising Bureau said.
It is clear that ad money is moving to the Internet from traditional advertising. This year, TNS Media Intelligence predicts that all ad spending will grow 1.7 percent compared with last year. TNS also said Internet ad spending would rise 16 percent and network TV revenue would rise 1.3 percent.
Brace yourself “old media” but in the US:
In 2006:
- Total ads grew 1.7%
- TV ads grew 2%
- Web ads grew 35%.
In 2007:
- TV ads will grow by 1.3%
- Web ads will grow by 16%.
The growth rates after 2007 are displayed, and until Web ads get 25% of total advertising, I see growth of web ads being above the total ad market growth.
According to this: Web would surpass TV by 2021. Crazy?
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August 15th, 2008 at 9:00 am
[…] while total web spending will surpass television ad spending for sure (we pegged this to happen in 2021, others say it will be sooner), I don’t see online video advertising revenue surpassing TV […]