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The long-predicted tipping point has arrived, with total U.S. digital advertising and marketing revenues set to surpass print revenues in 2010, according to a new study from Outsell, a consulting and research group serving the information industry.
This prediction, based on Outsell's annual survey of over 1,000 U.S. advertisers and marketers in December 2009, heralds one of the most important symbolic milestones in the history of online advertising.
Altogether, U.S. advertisers and marketers plan to spend $368 billion in 2010, Outsell found -- up 1.2% from about $364 billion in 2009. Within the 2010 figure, 32.5% ($119.6 billion) will go to digital, versus 30.3% ($111.5 billion) for print.
While the digital figure includes online advertising mainstays like display and search, it also includes direct marketing, represented by email, as well as investments in company Web sites, which will 53% ($63 billion) of the total digital spending.
As in previous years, print ad revenue declines will fall heaviest on newspapers -- with Outsell forecasting total ad revenues of $27 billion in 2010, down about 8% from 2009. Outsell also sees revenue for print directories falling about 8% to $11.6 billion. But it's not all bad news for print, as Outsell predicts a 2% increase in ad spending for magazines, rising to $9.4 billion.
Not every part of the digital market is buoyant. One surprising prediction in the report has mobile advertising revenues sinking 16% in 2010 compared to 2009. On the television front (combining broadcast and cable), Outsell has total TV ad revenues falling 6.5% to $59.6 billion.
Comparing revenues is a favorite way of tracking the rise and fall of media, especially in contests pitting "traditional" versus "new" or "digital" media. Leaving out marketing and focusing on advertising revenue in particular, the Internet eclipsed outdoor in 2000, when revenues totaled $8 billion, compared to $5.24 billion for outdoor.
2008 saw Internet ad revenues pass radio for the first time, with $23.4 billion for the Internet versus $19.5 billion for radio.
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Remember this is aggregate. So I don't think it is comparing apples to apples. CPM's are so much lower for digital as well as click through's and conversions being much lower (though they can track and measure this better). Last year a study showed 20 click throughs of digital ads per 10,000 page views. So in effect there is massive spend because those conversions are trackable and thus can be justified, vs someone seeing a Macy's sale in the NY Times and showing up without a coupon to know why they went that day.
And a bright side less paper is good. And is a digital ad on the NY Times website different than a print Ad in the newspaper? Not really aside from the lower fixed costs for digital because of no need for raw materials, printing and delivering the paper.
This headline isn't supported by the data. If the digital figure "also includes direct marketing, represented by email, as well as investments in company Web sites ..." shouldn't print also include include creative development, print collateral and direct mail? Echoing Michael's comments, please don't allocate budgets based on highly inaccurate headlines!
Forecasts are great aren't they :). Please keep in mind that there is such a blend and gray area now between what is considered digital and what is considered traditional. If you advertise in a newspaper and direct people to your website, is that considered digital? Is the website considered part of your print spend if you designed a microsite specifically for the print ad?
Just please, don't get wrapped up with digital versus traditional and allocate budgets to the wrong places just because others are allocating 30%. Figure out where your ROI is best, and create assets that support your own marketing mix.