Technology | Media | Telecommunications

Saturday, April 02, 2011

Newspaper Advertising Losses Could be Much Worse


Online advertising was predicted to gain share of U.S. marketer spending by more than 10 percentage points between 2009 and 2015. However, the current spending on digital media -- including internet and mobile -- has not yet risen significantly, according to the latest assessment by eMarketer.

Among the major media of television, internet, radio, mobile, newspapers and magazines, U.S. adults still spend the most time each day with TV. eMarketer estimates adults watched television for 42.9 percent of the time they spent each day with those media in 2010, and ad dollars align closely, at 42.7 percent.

The internet, by contrast, took up 25.2 percent of U.S. adult daily media time in 2010, but received just 18.7 percent of marketer's ad budget.

"Those of us focused on the internet channel have complained for years that it hasn't been getting its fair share of media dollars based on time spent," said eMarketer CEO Geoff Ramsey. "However, the precise extent of that imbalance has been shrouded in mystery and exaggeration. Now we know it's a gap of 6.5 percentage points."

Mobile ad spending is also behind. It claims 8.1 percent of time with these media, but most of that is devoted to communications activities marketers are not looking to interrupt.

Magazines and newspapers, meanwhile, still account for far more advertising budget investment -- relative to the known consumer consumption (or more to the point, the lack thereof).

eMarketer formed its estimates through a meta-analysis of data aggregated from research firms and other organizations that track advertising spending and time spent consuming various media.

These spending and consumption patterns mean that print media receive the most ad spending for each hour adults spend with them. Print ad spending has dropped considerably by this metric since 2008, but remains high.

Even television gets only a third of the ad spending per hour that print does. If you think that the U.S. newspaper and print magazine industries are in dire trouble now, then imagine how bad things could get for them when marketers react to the market reality.

When you consider that just $0.12 was spent on internet advertising for each hour adults were engaged on the web last year, and that mobile got only one penny per hour of engagement -- it's a major disconnect. That said, today's savvy online marketers may actually be able to benefit from this scenario.