You have to remember what the "e" stands for in this case (electronic, as in online, as in internet, as in not on television!). Right in the first paragraph of the release below comes problems with "overall TV viewership is dropping". So far this is a fun myth to perpetuate by all of those who feel the power of the Internet. It's got an almost Borg-like "you will be assimilated" quality to it.
Unfortunately, so far it's not true. Overall, BROADCAST TV viewership is dropping, but that's much more at the expense of Cable than the Internet. Overall, TV viewing seems to be holding steady, and it's the broadcasters who are feeling the pain. That said, I buy the decline in ad spending -- you know when you're seeing promotions for World of War DVDs during primetime, on the broadcast networks, there is a decline in ad spending. It doesn't take research to figure that out! Here's the release from eMarketer:
Numbers Show Decline in TV Ad Spending
JANUARY 27, 2009
Negative 4.2% growth projected in 2009
Concurrently, US online video ad spending is expected to grow 45% to $850 million in 2009. Video is the fastest-growing format on the Internet, making expansion from offline video into online video that much more attractive.
Broadcasters need to find a way to redefine their businesses in an increasingly digital world to take advantage of this growth. In many cases, that means a focus on expanding programming to the online realm and testing business models there. Indeed, a trend is for viewers to go online to watch ads following the Super Bowl.
The TV networks are drawn to the growth in online video ad spending because the video format plays to their programming strengths, even if they have not yet figured out exactly how to effectively monetize online video.
“As television and PC technologies converge further, the potential exists for enhanced engagement with viewers—and more advertising opportunities,” said Carol Krol, senior analyst and author of the report, “Television’s New Picture: Seismic Shifts in the Digital Age.”
“But the networks will only succeed if they can continue to demonstrate a willingness to adapt to rapid online changes, weather the recession and respond to the changing viewing habits of their audiences,” Ms. Krol said.
The TV industry needs to sort out the winning business model, whether it is primarily advertising or a hybrid of advertising and premium pricing. Until that is defined, growth will be hampered.
To speak to Ms. Krol about the convergence of traditional and digital media, reach out to the eMarketer media contact listed below.
About eMarketer
eMarketer is "The First Place to Look" for research and analysis on digital marketing and media. eMarketer aggregates and analyzes research from over 3,000 sources, and brings it together in analyst reports, daily articles and the most comprehensive database of online marketing statistics in the world.
Since they’re offering the author of this report for interviews, why not interview her?
Mikey, why doesn’t someone air reruns of Firefly on Thursdays and Fridays in prime-time? Same answer: there’s just not enough interest in it. Not even from me. I’m certainly not hoping or expecting to learn anything from it and it would devolve into my exclaiming, “So, Stephon Marbury’s market is growing faster than the TV ad market too.”
but speaking of NBA, here’s something from Mark Cuban related to internet video that you’ll appreciate.
http://blogmaverick.com/2009/01/27/the-great-internet-video-lie/
Sure, eMarketer slants favors the notion that “online advertising is the way to go!” However, this article does raise some valid points. Ad spending on broadcast TV is falling. The networks that are even attempting to weather the current economic storm, IMHO, are NBC and FOX. NBC can leverage its sports strength, and its cable strength, to offset losses in it prime-time broadcast slots. FOX is already at a cost advantage due to no network-based 10pm programming expense. FOX is the first network to try and DVR-proof the commercial breaks in scripted programming, with the “Fringe” experiment. Judging by the C+3 data, and the premium price for which Fringe ads are selling, I’d say that experiment is working well at this point. Will CBS and ABC continue to hold to the traditional advertising business model? How long until they try something different too?