The good news: TV won’t ever ‘overtake’ the internet
Cast your mind back. You may remember a year ago when our cheeky cousins at the IAB announced that internet advertising revenue had finally ‘overtaken’ TV advertising revenue in the first half of 2009. This prompted some ugly triumphalism from internet fundamentalists and telly was given a right old kicking in the press. A year on our bruises have healed, and we’re all friends again.
But guess what; various press stories appeared last week using the 2010 first half figures from the Advertising Association to state that apparently TV had ‘overtaken’ the internet again. In the first half of the year TV had 25.5% share of advertising spending, and ‘the internet’ had 24.3%. Whoopee, you might expect us to say; boo-sucks to the internet, reap what ye sow, don’t throw stones in glass houses, hoisted by your own petard and similar sanctimonious retributions.
Except we are saving our celebrations for something that actually counts. At the risk of repeating myself, on the anniversary of TV’s trashing and while ‘online advertising’ spend is fresh in our minds, I would like to revisit why the ‘who is the bigger medium?’ question is the chocolate teapot of media debates.
It is not comparing like with like
TV is a medium, the internet is not; it is a fantastic technology that enables a variety of activities, from banking to shopping to email to TV to radio to newspapers and all things in between. It would be like naming everything that uses print technology – from posters, door drops and catalogues to directories, magazines, DM and newspapers, not to mention phenomena like books, leaflets, or letters – a single medium.
‘Online advertising’ doesn’t exist
There is no single thing called ‘online advertising’; it is a confusing catch-all term for the wide variety of very different types of advertising, including online search, display, social media and classified advertising. These are mature enough now to be looked at individually, as people do with the different forms of print, not lumped together. Aggregating revenues from such disparate disciplines in order to create a PR-able big number is meaningless.
TV *hearts* the internet
I never tire of saying this. TV advertising and most forms of internet advertising are genuinely not in competition. Search – by some margin the biggest medium within the internet sector – and email marketing do completely different things for advertisers and are wholly complementary to TV. Google calls it a ‘special relationship’ and this was underlined by our joint research with the IAB. Online display formats of course can be substitutes for TV, but the fastest growing one is … online TV.
TV is available on the internet
The increasing convergence between TV (the content) and the internet (the technology) makes comparing the two fundamentally flawed. TV will be increasingly watched via the internet, broadband connected TV sets are launching, and the most attractive and effective part of online display to advertisers is the advertising spaces around on-demand TV.
If you still care about what the biggest advertising sector is, it’s print
If the same methodology of aggregating revenues from different types of advertising that use one particular technology was used generally, then ‘print’ would remain the biggest advertising sector. TV advertising and ‘online advertising’ never have been, and neither is now. TV however is the biggest display medium by a wide and increasing margin.
Online never ‘overtook’ TV anyway
Ironically, despite what the IAB announced a year ago, ‘online advertising’ never finally ‘overtook’ TV in 2009. If you want all the numbers here goes…
Ofcom’s figures, the most reliable source, list net TV revenue in 2009 at £3.136bn. Expressed as a number gross of 15% agency commission that comes to £3.689bn. The Advertising Association figures are generally listed gross of 15% agency commission for all media. They have 2009 TV spot revenue only at £3.525bn gross, plus listed separately is £160m of TV sponsorship. Together that comes to £3.685bn gross, almost exactly Ofcom’s number. The AA uses the IAB’s self-published figure for ‘online advertising’ of £3.541bn gross in 2009.
There you have it: TV (excluding online TV) took £3.685bn in gross advertising revenue in 2009 and the whole online sector £3.541bn gross.
It gets confusing because the AA separates TV sponsorship from spot and lots of people get mixed up between net and gross (including some very large media agencies). So TV wasn’t overtaken it seems, so therefore can’t have regained some spurious position it never lost in the first place.
But we genuinely don’t care
Who does? We haven’t made a big deal out of this ourselves because, however tempting it might be, we are not in the business of comparing the two (Ok, apart from right now, but that’s only to show how fatuous it is). TV’s share of total and display advertising rose last year (as it also did in 2008), which might have justified a bit of showing off. But when TV revenues were down nearly 10% it seemed a bit sick to get excited. A year will probably come again when the online sector grows faster than TV but we’ll still be happy as long as it’s not at TV’s expense.
Real reasons to celebrate
2010 is a different issue. Display advertising has come back strongly this year. All media that are brand building are doing better, from cinema to outdoor. TV revenue seems to be growing by more than 12% and faster than any other medium this year. All of 2009’s revenue decline will be regained . Now those are facts we are happy to say ‘Whoopee’ to.