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Vin Crosbie Vin Crosbie
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Dorian Benkoil Dorian Benkoil
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Bob Cauthorn Bob Cauthorn
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Ben Compaine Ben Compaine
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Dorian Benkoil senior consultant at Teeming Media. An award-winning journalist and editor, he was a foreign correspondent for AP and Newsweek, and international and managing editor for ABCNews.com. At ABC News he moved to the business side, handling sales integration and business development, before joining Fairchild Publications as General Manager for their Internet division, becoming editorial director for mediabistro.com, then a consultant for Teeming Media in New York. He graduates this year with an MBA from Baruch's Zicklin school of business. Learn more about him at Benkoil.com or his blog - MediaFlect.com.

Robert Cauthorn is a journalist, former vice president of digital media at the San Francisco Chronicle, and was the third recipient of the Newspaper Association of America's prestigious Digital Pioneer Award. He launched one of the first five newspapers web sites in the world and is generally considered to have delivered the first profitable newspaper web site in 1995. Cauthorn has been in the middle of the transition from old media to new and is recognized as frank-talking critic when he believes newspapers stray for their mission. In mid-2004 he became the president of CityTools, LLC a new media startup based in San Francisco.

Ben Compaine has divided his career between the academic world and private business. He was a journalist when manual typewriters were considered state of the art, but also led the conversion of his college newspaper to cold type. He has started and managed weekly newspapers. His dissertation at Temple University in 1977 was about the changing technologies that were going to unsettle the landscape of the staid and low profit newspaper industry. Since then he has focused his research and consulting on examining the forces and trends at work in the information industries. Among his most well-known works (and the name of his blog) is "Who Owns the Media?".

Vin Crosbie has been called "the Practical Futurist" by Folio, the trade journal of the American magazine industry. Editor & Publisher magazine, the trade journal of the American newspaper industry, devoted the Overview chapter of executive research report Digital Delivery of News: A How-to Guide for Publishers to his work. His speech to the National Association of Broadcasters annual conference was one of 24 orations selected by a team of speech professors for publication in the reference book Representative American Speeches 2004-2005. He has keynoted the Seybold Publishing Strategies conference in 2000; co-chaired and co-moderated last year's annual Beyond the Printed Word the digital publishing conference in Vienna; and regularly speaks at most major online news media conferences. He is currently in residence as adjunct professor of visual and interactive communications and senior consultant on executive education in new media at Syracuse University's S.I. Newhouse School of Public Communications, and meanwhile is managing partner of the media consulting firm of Digital Deliverance LLC in Greenwich, Connecticut.
About this blog
Two forces have shattered the news media. Technology is the first. Although media technology is undergoing its greatest change since the day in 1440 when Johannes Gutenberg first inked type, for more than ten years now the news industry has mistaken new technologies merely as electronic ways to distribute otherwise printed or analog products. Estrangement is the second. The news media has lost touch with people's needs and interests during the past 30 years, as demonstrated by rapidly declining readerships of newspapers and audiences of broadcast news. How we rebuild news media appropriate to the 21st Century from the growing rubble of this industry is the subject of this group weblog.

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March 16, 2007

2006 advertising numbers for media shows familiar story: Online is sucking up all the growth

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Posted by Ben Compaine

The recently tabulated results of advertising expenditures in U.S. by TNS Media Intelligence tells a familiar story, with few surprises. Looking at the five years from 2002 to 2006, advertising in “measured media” overall increased 23.7%, from $121 billion to almost $150 billion. This was just slightly ahead of the growth of the total economy, which expanded by 23.1%.

But the story is, as usual, in the details. First, the big picture. As is certainly no surprise, Internet advertising is for real. From 6% of the total in 2002-2003, it zipped to 12.4% in 2006, eclipsing radio and closing in on newspapers and magazines. TNS only includes display advertising in the Internet totals. I have approximated revenues from search-based advertising, using most of Google’s revenue from 2004-2006 as a rough (and likely understated) estimate. For example, in 2006 Google had $10.6 billion revenue. I included $10 billion. Search revenue from Yahoo, Microsoft, Ask and others would only accentuate the Internet trend. ad_expenditures.JPG
We also see that television, which includes both broadcast and cable, is in the same relative market share decline as is the print media. According to the TNS compilation, all media sectors except newspapers showed some growth in actual dollar revenue. A finer grain analysis of the data, however, indicates that most of the revenue growth for television has been in cable, although even that has slowed in recent years. The other hot spot is in Spanish language media, which nearly doubled its overall share of the total from 1.6% in 2002 to 3.0% in 2006. Nearly 90% of last year’s $4.8 billion was for television (and is included in the total figure for TV).

Of course, TNS’ method of accounting does not take into consideration the large chunks of the Internet’s advertising that does get into the pockets of newspaper and magazine publishers as well as television and radio outlets, through their own Web operations. But the value of this exercise is seeing what is going on with traditional media formats vs. the newer ones, aggregated as “the Internet.”

I have focused here on market share. So long as the overall advertising pie continues to grow legacy media can continue to see revenue growth, though at a slower rate than the pie. But any media company’s strategy needs to include a way of capturing a substantial share of the sector with the highest growth. And that is once again confirmed as being in the online world.

Various compilations of advertising revenue shows wildly different numbers, though the trends are fairly consistent. For example, the Newspaper Advertising Bureau (NAB) just reported that newspaper advertising revenue for 2006 was $46.6 billion, a decline of 1.7% from 2005. This is far higher than the $28.0 billion reported by TNS, but consistent with the decline noted by TSN. NAB also found that the online revenue of newspapers was $2.7 billion in 2006. It is noteworthy that although this was 32% ahead of the previous year’s online revenue, it lagged the 34% revenue growth rate for online revenue overall. That is, newspapers are not quite holding their own with their competitors in the online world.

Differences in numbers can be attributed to what is counted. TSN, for example, does not include direct mail, which has elsewhere been shown to be a robust 15%-16% of advertising dollars. It may also reflect what is being tracked. TSN, for example, looks at advertising expenditures. The NAB is computing advertising revenue. For my purposes, the absolute dollar amount is less critical than the trends and the consistency of any one source's data collection.

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March 2, 2007