The TV Channel Is Changing - eMarketer
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The TV Channel Is Changing

Please do not adjust your dial, but do be prepared to switch your thinking.

TV still has mass, but not nearly as much as it used to.

Unquestionably, television remains a dominant media format. eMarketer estimates there will be $284.8 billion in total US ad spending in 2008, and TV still garners 25% of those dollars. But growth is slowing.

According to eMarketer, in 2009 US TV advertising spending will decline 4.2% to $66.9 billion.

“This precipitous drop reflects not only the poor economic conditions, but fundamental changes in the way television advertising is being bought and sold,” says Carol Krol, eMarketer senior analyst and author of the new report, Television’s New Picture: Seismic Shifts in the Digital Age. “Fragmentation and declines in viewership have made it more difficult for advertisers to reach audiences.”

Consumers are accessing video content beyond the TV screen—and much of that viewing is occurring online.

“Although there will be inevitable stumbling as they find their footing, the broadcast networks are making bold and interesting choices in an effort to follow consumers online,” says Ms. Krol. “They are collaborating with competitors, hooking up with online partners and forging alliances that were unheard of just a few years ago.”

The TV networks are paying close attention to the rise in online video ad spending, since online video most closely resembles the television experience and consumers are viewing more programming online.

Although online video ad spending as a percent of TV ad spending is currently less than 1%, according to eMarketer projections, it will grow to 1.7% in 2010. That is still only a small fraction of total TV spending, but dollars will continue to flow in that direction.

“It is early in the game and there is no clear winning online business model for broadcasters,” says Ms. Krol. “And while selling online advertising—both display ads and advertising within video streams—shows great promise, those revenues are not sufficient to offset the loss of offline revenues.”

Not yet, anyway.

Get the information you need to succeed in the fast-changing world of digital marketing and media, look into an eMarketer Total Access Subscription for your company today.



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