We interrupt our series on brand evolution for an important hype alert.
“OMFG! Overnight, Internet ad spending has surpassed TV adverting!” crows MediaPost.
“A corner has been turned in consumer and advertising habits, and there’s probably no turning back,” intones Fast Company.
Yes, it’s another milestone, another chance to claim the world has turned upside down, but is it really that significant?
Yesterday, the UK’s Guardian announced that analysis by PricewaterhouseCoopers and the Internet Advertising Bureau found the UK to be the first major economy where advertisers spent more on Internet advertising than on television advertising.
That is a milestone. But is it the milestone that “marks a watershed for the embattled TV industry”? I don’t think it is. Rather, I agree with Lindsey Clay, Thinkbox’s marketing director, who suggests that overall comparisons like these are “interesting but meaningless.” (Click here to read the BBC story.)
Why is it interesting but meaningless? Because comparing Internet spending to TV is to compare a bowl of fruit salad to an apple.
Is paid search advertising in any way comparable to advertising on TV? No, but search makes up 60 percent of the £1.75 billion spent on Internet advertising in the UK.
Is classified advertising in any way comparable to advertising on TV? No, but the IAB report estimates that it makes up 22 percent of UK online ad spending.
What about display advertising? Most of it is comparable to print or outdoor advertising, not TV. Display advertising makes up about 18 percent of UK online ad spending, but only a tiny fraction is accounted for by online video advertising. Based on the Guardian article, online video advertising garnered £12 million out of the total of £1.75 billion.
I think you may have grasped the point by now. The vast majority of ad spend is going to digital channels that might better be compared to yellow pages, personal ads, direct mail, print or outdoor. Add the spend in those “traditional” media together with TV and you might have a better basis for comparison. And guess what? On that basis, the Internet will resume its rightful place in the media mix as an exciting and promising medium that complements the strengths of existing “traditional” media.
I realize that the IAB is doing its best to promote the industry it represents, but I really do wonder whether comparisons like this are helpful. In my opinion it would be far better to publicize each different form of advertising on its own merits. Online search is unquestionably a better medium than its predecessors, but it is not a replacement for TV advertising. In fact, all the evidence suggests that search works better in conjunction with traditional media and less well in isolation. Why not just admit that fact and focus on educating advertisers on how best to use the two media in conjunction?
OK, enough on this topic. Scheduled service will be resumed next week. Comments anyone?
(3 votes, average: 5 out of 5)
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October 1st, 2009 at 10:12 am
Agreed; if you are one of the thousands of small brands and companies, online spend is affordable, when you could neveer afford TV. I’m sure online spend is heavily skewed to such small players. Whereas for the majority of big brands, TV is still the main part of their adveertising budget.
Still; it does mean that for many thousands of brands and compaanies, online spend is important.
October 1st, 2009 at 10:25 am
They should be comparing internet spend to print spend. That is being decimated. Take a look a this Fall’s issue of Vogue. It used to be inches think. Not this year.
October 1st, 2009 at 10:29 am
Agree with both of you. If you look at the google ads there is only a small fraction of ‘TV-spending-brands’ - the rest are small online retailers selling the stuff that’s been made famous by… well, TV mostly.
Try this one for example: Perfume google adshttp://www.google.co.uk/sponsoredlinks?q=perfume
Somewhere in the region of 350 people bidding on that one word - and probably collectively spending £1000s per day. Many of these smaller retailers would never consider TV (or even glossy print) - but they’d soon die if the brands they sell took the same approach.
October 1st, 2009 at 1:09 pm
But you can get around the fact that it’s money, and it’s being spent…
If Search spend is increasing (+7%) while conventional forms of advertising (Display include as it uses the same central mechanism) are declining ( TV -16%, Online Display -5%) this has to be of significance to the advertising landscape and those who research it.
Therefore the question is if our clients are spending it shouldn’t we be tracking it?
My view is: No. Or only insofar as we track a brand’s distribution network, retail locations, packaging, ordering systems or any of the other factors that dictate whether or not consumers can interact with them (this is crucially different to whether they want to interact with them, which I believe is where advertising comes in). A sponsored link is no more(or less) an advert than the sign outside the shop. And this analogy goes further, explaining the competitive nature of occupying key locations in which to put up these signs; whether a prime outlet in a new shopping centre or a top listing on a ubiquitous search term, but this again is not close to the central concerns of tracking advertising.
October 1st, 2009 at 5:59 pm
Furthermore, the IAB report splits out press display and classified. Combined, those are both still higher than online (29.5% vs. 23.5%)
October 1st, 2009 at 7:14 pm
I like what you say, but you normally use USA three letter acronyms I understand like CIA or CSI or OMG.
What does OMFG stand for?
Or am I stupid? Or was the press announcement about On-line surpassing TV aimed at people that understand things I do not?
I have in 20 years of association never heard you use the F-word so that is not what the F stands for.
In this case I will excuse you for using the F word, if that is what you just did.
erik
October 1st, 2009 at 8:46 pm
Erik, I have to point out in my own defense that I was quoting someone else. Besides, I assumed the F stood for “freaking.”
I wish I could say that none of my other colleagues had heard me utter the F word but sadly that would be untrue.
October 3rd, 2009 at 5:04 am
Comparing Internet ad spending to other media has one major problem for me - Internet reports are just estimations while other media (even outdoor) are measured more precisely.
October 7th, 2009 at 9:27 am
Nigel, I have had quite a bit of time to think about this and I believe this marks a milestone. The fact that internet spending is higher than TV spending is in fact a milestone. If it is a milestone, is it an aberration in the data or an indicator of things to come? I believe it is an indicator of things to come.
Today in Canada the National Post newspaper has filed for bankruptcy. Are people reading less or are they getting their news in a diffferent way. I am quite sure they are getting there news via the internet. Advertising dollars have shifted from Newspaper to internet same holds true for Magazines. Conde Nast has just announced that after a thorough analysis they are closing some of their magazines. Why? Because advertising dollars have shifted from magazine to internet.
Many people say the digital revolution that started with the birth of the internet is in full swing I disagree Globally we are still an adolescent. Here is an interesting website that I came upon total global internet population. I am willing to wager that global internet population will eventually double . How long will i take ? not sure at this time but i am sure it will double. Especially when we look at smart phones being used to access the internet.
Getting back to Canada now, Zentith optimedia in an article in marketing magazine has indicated that in Canada the Internet will become the number two medium in terms of advertising dollars spent by a forecast they stated in the article. I am willing to wager that many other countries that have high GDP per capita will see the internet becoming the number one or two medium in terms of advertising spending in the not to distant future. It is not just about advertising spending but about the digital revolution that is still entering our lives and continuing to effect our lives and the economy.
Regards, John G Schneider
October 7th, 2009 at 10:12 am
Hi John, thanks for the comment. I am not sure we are that far apart in our beliefs.
I do believe this is a milestone. I do believe it is indicative of changes taking place in our industry and the world. However, I think it does marketers a disservice to compare Internet spend overall with one specific medium. The Internet is so powerful because it encompasses multiple communication modes not just one. It is not the milestone I am taking aim at it is the comparison.