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Television Ad Spending Bounces Back, Virtually Unaffected by Online Growth

Print and directories show biggest losses in ad revenues

NEW YORK (March 29, 2011)—Television advertising spending has bounced back from the recession, growing 9.7% to $59 billion in 2010, and its steadying share of overall US advertising revenues suggests TV has been largely unaffected by the dramatic growth of online advertising, according to an upcoming report by eMarketer.

This year, growth in television advertising will slow to 2.5%, bringing total TV spending to $60.5 billion. Television’s share of US ad dollars is expected to rise to 39.1% in 2011, up from 38.6% in 2010, eMarketer estimates. While this growth in market share can mostly be attributed to the recovering economy, it also suggests that the growth of online advertising spending has come at the expense of other media, such as newspapers, magazines and directories—not television.

“TV advertising is on course to return to prerecession levels,” said eMarketer CEO and co-founder Geoff Ramsey. “While the growth of online advertising has been robust, it hasn’t stopped brand advertisers from keeping the bulk of their budgets flowing through TV sets.”

eMarketer, which formed its forecast through a meta-analysis of data aggregated from research firms and other organizations that track advertising spending, estimates online advertising accounted for 16.9% of major media ad spending in the US last year, up from 15.4% in 2009. This year, eMarketer estimates the internet’s share of overall major media ad spending will grow to 18.4%.

Between 2009 and 2015, eMarketer expects online advertising to gain more than 10 percentage points in its share of all major media ad spending. In 2010, the internet surpassed newspapers as the second-biggest advertising medium after television.

TV will continue to see the greatest share of all ad dollars in the US, with its slice of ad spending holding steady around 39% through 2015. Radio and outdoor will similarly hold flat shares of total ad spending.

Other media will suffer declines in share as spending, like consumption, shifts to the internet. The big losers will be print, including newspapers and magazines, which will lose a combined 9.3 percentage points of market share between 2009 and 2015. Directories will see their share of all ad dollars more than halved over the same period.

Advertising on the radio suffered during the recession, along with all media, but eMarketer estimates it grew 7.2% in 2010 to reach $15.3 billion. Ad spending on digital radio sites such as Pandora remains small but is growing quickly. eMarketer estimates digital radio ad spending grew 28.1% to $600 million in 2010, and spending is expected to double from $800 million this year to $1.6 billion by 2015.

Other Key Findings:

  • Despite the economic recovery, aggregate spending on major media is still not expected to reach prerecession levels through 2015.
  • Online advertising spending is expected to eclipse print spending in 2013, when combined US print ad revenues at newspapers and magazines drops to $32.8 billion—compared to $36 billion in US online ad revenues.
  • Meanwhile, US online ad revenues at magazines grew 14.6% to $2.2 billion in 2010, while print revenues at magazines fell to $14.7 billion, down 5% from $15.5 billion in 2009.
  • Online newspaper revenues are expected to grow 8.6% to $3.3 billion in 2011, up from $3 billion in 2010. Print newspaper revenues will fall 6% to $21.4 billion in 2011, down from $22.8 billion last year.

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Clark Fredricksen
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Posted on March 29, 2011.