What is happening with traditional advertising?
October 8th, 2007. Posted by Greg Randall
I read an article the other day which dealt with the question of whether the “dot-com bubble” bursting was going to repeat anytime soon. I couldn’t quite believe there are those who consider the world wide web self-imploding as it did 7 years ago, even despite the current upward global trends: proper investments in online businesses, steadily growing e-Commerce spending, Google’s dominance, people researching online before purchasing. More specifically, a Jack Myers report states online advertising would grow 24 percent in 2008 and 28.5 percent in 2009. This statistic puts online’s market share of ad spending at 8.4 percent in 2008 and 10.4 percent in 2009. With this said, it is difficult to believe there are those who still feel sceptical of the web’s future.
I thought, OK, maybe to impact this growing minority it would be prudent to focus on downward indicators of established/traditional media to represent positive online trends.
The same Jack Myer’s report, listed predictions for traditional forms of advertising:
1) Broadcast network TV will increase 2.0 percent in 2007 and 3.2 percent in 2008 but will adjust downward in 2009, losing 4.0 percent.
2) Radio is expected to decline 2.0 percent in 2007 and rebound with 2.5 percent growth in 2008 before declining 4.0 percent in 2009.
3) The largest declines in ad spending will be suffered by newspapers, which will lose 4.6 percent in ad revenues in 2007, 2.4 percent in 2008, and 4.5 percent in 2009.
In response to the Meyers report, “The Financial Times” published an article entitled “Online advertisers may gain from downturn” that validates the theory that online will grow even if the economy turns. According to the article, “Indeed, pressure on companies to cut costs if the economy softens could even hasten the switch in spending from traditional media to more targeted and measurable digital forms.” In other words, when companies apply the budgetary squeeze, and marketers need to be more economically frugal with the advertising spend; they will turn to the most cost effective and transparent method to ensure they are getting return on their dollar. Traditional media will never be able to compete with the level of transparency offered by the web.
No matter how you spin it, it still looks good unless you are in traditional media. Now I know who has been asking the questions about the “dot-com bubble” bursting.
I would like to acknowledge Harry Gold from Clickz, for his article titled “Get Ready for the Good News and a Lot More Work”.