US adults spent nearly five times as much time watching television as they did online during the first quarter of 2006, according to a study by market research firm Bridge Ratings. So Internet advertising spending is probably about 20% of TV ad spending, right?
Not yet.
The longtime story behind Internet ad spending has been that it has lagged in proportion to the time people spend online. And although Internet ad spending has grown consistently and robustly since the last quarter of 2004, according to TNS Media Intelligence, the story remains the same.
Not only does TV continue to dominate as an ad spending category, it does so in numbers disproportionate to the amount of time people actually spend on the media, at least compared to the Internet. Nearly seven times as much was spent on TV advertising in the US during the first quarter of 2006 than was spent on Internet advertising, according to the study. The large dollar amounts spent on TV advertising likely also carry some weight when it comes to advertiser mindshare: Despite a fragmenting audience, debates over TiVo-led time-shifting and a great deal of lip service paid to increasing Internet marketing efforts, advertisers continue to be more comfortable promoting their products via TV tube (or, fine, flat panel) than online, judging strictly by dollars spent.
It is not as if ad spending was especially tight during the first half of 2006, either. Overall ad spending increased by nearly 5% compared to the first half of 2005, and Internet advertising was not the only growth story. Circulars and Hispanic media also had roughly 20% growth over the prior half-year. Still, if TV's audience is perceived as fragmented, the same may be said even more readily about the Internet; TV may have hundreds of channels, but the Internet has millions of sites, which can make even targeted online advertising more daunting than the familiar media buying formats offered by TV.
For data and analysis on US online advertising, read eMarketer's forthcoming report US Online Ad Spending. You can sign up to be notified when this report is released.