Technology | Media | Telecommunications

Saturday, December 20, 2008

How Digital Media Disrupted All Advertising


Advertising spending began contracting in early 2008, well before the financial crisis unfolded in the fall. Among traditional media, television is predicted to fare better than newspapers, magazines and radio.

National media will do better than local, but national ad growth has been exceptionally slow this year. Digital media is a truly disruptive force, across all traditional advertising segments.

While no one can predict the length of the economic crisis or its severity, there is slim chance of any sort of recovery in 2009. eMarketer forecasts a decline of 4.2 percent in U.S. television ad spending in 2009.

Similarly, Myers Publishing predicts ad spending for TV will decline by 4.0 percent next year. Barclays Capital has the gloomiest outlook, estimating TV advertising expenditures will drop an unprecedented 7.8 percent in 2009.

Industry forecasters have continued to lower ad spending projections across the board for all U.S. media due to the ongoing slump in the advertising market. In 2009, the double trouble of the poor economy and no Olympic or major political expenditures will only drag down spending further and bring the overall forecast into negative territory.

Combined, all forms of TV (local and national spot TV, broadcast and cable, etc.) will command 31.2 percent of ad dollars among all media in 2008, according to Myers Publishing.

Traditional media is also reeling from the shift to more online media consumption, according to Carol Krol, senior analyst at eMarketer. "The shift in consumer usage toward digital media will continue to erode TV's share," she said.

Online digital marketing share is comparatively small, according to Myers Publishing (10.6 percent), but advertising via the Internet will continue to enjoy robust year-over-year growth through 2010.