The next time your CEO asks you why you’re spending money on streaming, text messaging applications, building that social networking component, creating a blog, and designing that new music discovery section on your website, remind him/her of this fact:
The exodus of ad spending from traditional media to the Internet is accelerating.
And to that end, remind them of this quote from the Great One, Wayne Gretzky:
“I skate to where the puck is going to be, not where it has been.”
A recent study from TNS Media Intelligence shows that the top 100 advertisers spent $230 million less in 2006 than in 2005 on "old media" – TV, radio, and print. Conversely, their online advertising efforts jumped by $558 million.
They cite American Express as an example. The firm’s online advertising rocketed 180%, while traditional advertising dropped 13%. Yet, eMarketer analyst David Hallerman notes there’s a bit of a dichotomy in that while ad dollars are shifting to "new media," most advertisers still prefer traditional media strategies.
So what does that mean for a medium like broadcast radio? We have the best of both worlds. Radio is still all about massive cume audience (and PPM numbers are even better), strong, reliable brands, and the potential to have great web resources that complement its on-air sound and philosophies. And Radio can drive its cume to its websites by just getting on the air and asking for the order. It’s a proven strategy, but it requires an enlightened sales and marketing strategy, better hiring/training of sales people, investment in online tools and personnel, and a serious reality check inside station clusters and corporate boardrooms.
Dollars are shifting. It’s time that radio shifts, too.
Jacobs Media has consistently walked the walk in the digital space, providing insights and guidance through its well-read national Techsurveys.
In 2008, jacapps was launched - a mobile apps company that has designed and built more than 1,300 apps for both the Apple and Android platforms. In 2013, the DASH Conference was created - a mashup of radio and automotive, designed to foster better understanding of the "connected car" and its impact.
Along with providing the creative and intellectual direction for the company, Fred consults many of Jacobs Media's commercial and public radio clients, in addition to media brands looking to thrive in the rapidly changing tech environment.
Fred was inducted into the Radio Hall of Fame in 2018.
- Baby, Please Don’t Go - November 22, 2024
- Why Radio Needs To Stop Chasing The Puck - November 21, 2024
- Great Radio – In The Niche Of Time? - November 20, 2024
Here is recently published research from IBM and it’s pretty chilling.
IBM Predicts Shift to Interactive Advertising
A major shift away from traditional advertising to interactive ad formats will occur in the next five years, according a report released by IBM Global Business Services. It’s title is “The End of Advertising as We Know it.”
The main future growth areas will involve advertising distributed through mobile communications devices and the Internet, followed by ads embedded in video games. Growth in these areas is anticipated to be up to four times faster than that of traditional media used for direct marketing.
Two-thirds of the executives polled expect 20% of ad expenditures in the next three years will shift way from impression-based pricing formats where the actual impact of ads can be tracked — and priced accordingly.
Internet advertising will increasingly be distributed through online advertising networks and social networking Web sites.
Greater data tracking capabilities will improve the ability to target individual consumers with personalized advertising based more on lifestyle data, than contemporary methods for targeting by Zip codes and at the household level.
IBM’s findings are based on surveys of more than 80 advertising executives and analysis of recent trends concerning how consumers have gained more control over how they view, interact with and filter out electronic forms of advertising.
Ellyn, thanks for the great comment. We are clearly nearing a tipping point.