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Digital Budgets Shift from Print but Still Lag Behind Usage

Consumers spend much more time online than with print, but dollars don’t follow

July 21, 2011 | Media Buying

Digital advertising spending will climb more than 20% this year and will continue growing in the double digits for the next three years, eMarketer estimates. But where will those digital dollars come from? While some marketers plan to allocate additional money to online, most will shift dollars from traditional media to their internet channels.

An RSW/US survey of marketing decision-makers in March 2011 asked how much of their budgets had shifted from traditional buckets to digital ones in the past three years. Nearly a quarter of respondents said they had reallocated 20% of their budget to digital and almost another quarter said they had shifted 30% from traditional to digital. A third had moved even more dollars from traditional to online.

Percent of Marketing Spending Shifted from Traditional to Digital According to US Marketers, March 2011 (% of respondents)

Specifically, it is the print budget that will increasingly take a hit from such a shift. eMarketer predicts that magazine and newspaper advertising will decline as digital ad spending will rise. In 2011, internet advertising is already the second-highest advertising medium behind TV. But the combined advertising spend of newspapers and magazines is $4 billion higher. Next year, the situation will be reversed. Marketers will spend $2.9 billion more on internet advertising than on print.

US Total Media Ad Spending, by Media, 2009-2015 (billions)

In spite of the trending of dollars to digital, though, ad spending is still not keeping up with the time consumers spend online, eMarketer demonstrates. While consumers spent 25% of their total daily media time online in 2010, advertisers only spent 17% of their advertising budget on digital.

US Total Media Ad Spending Share, by Media, 2009-2015 (% of total)

Even this year, just 19.9% of ad dollars will go online, still behind last year’s consumption levels.

Meanwhile, as consumers’ attention strays markedly from print, the ad spending dedicated there remains disproportionate. People spent 4.9% of their time reading newspapers in 2010, but marketers committed 14.9% of their budget to that medium. In magazines, the contrast is equally dramatic. Magazines commanded just a 3.3% share of consumer’s time in 2010, but spending was 9.6% of marketers’ budgets.

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Check out today’s other article, “Advertisers Continue to Rely on Ad Network, Publisher Site Placements.”



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