Ad spending growth grinds to a halt, while online growth stays brisk

John Shinal · December 17, 2007 · Short URL:

If you ever wonder why traditional media companies are paying big sums to acquire online companies and otherwise scrambling to find an online audience, just look at the latest figures on U.S. ad spending.

For the first nine months of this year, U.S. ad spending was essentially flat from the same period in 2006, rising 0.2% to $108.1 billion. Spending in three important categories -- for TV, newspaper and radio ads -- all fell from a year ago, according to TNS Media Intelligence.

Meanwhile, on the Internet, growth continued at a healthy 17% annual pace. U.S. online ad spending hit $8.38 billion, thereby surpassing radio as an ad medium for the period. 

Newspapers suffered the biggest percentage drop, falling 5.2% to $19.2 billion, while TV slipped 1.9% to $46.4 billion and radio about the same amount, 1.8% to $8 billion. The pain for newspapers was spread across the board, with local, national and Spanish-language publications all falling.

The one bright spot among traditional media companies was for magazine spending, where consumer-focused titles and Spanish-language publications helped drive overall category growth of 4.7%, to $21.8 billion.

Within the magazine category, however, business-to-business titles and local publications fell from a year earlier.

The negative trends in newspapers and print magazines, combined with continued growth in online spending, suggests that we'll soon see more consolidation within those industries which may include combining online and print operations, both on the business side and in newsrooms. 

To see the entire report, click here




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