top of page

Advertising: It will take four years to return to pre-recession levels

A terrific and timely analysis from MediaPost:

This is virtually unprecedented in U.S. history. In the past, ad-spending declines linked to broader recessions were almost always followed by major rebounds as the economy rallied. But a new dynamic is clearly at work in the advertising industry, with the rise of the Internet bringing greater efficiency, but not necessarily more overall spending. The trend is evident when you compare year-over-year growth rates in U.S. gross domestic product and ad spending. In the past, changes in ad spending mirrored the underlying economic trend in a straightforward way.

But not so in recent years:

This slow rebound is thanks to (of course) the Internet:

…suggesting that marketers were exercising more precise control in their allocation of ad budgets. They were able to do this, in large part, because of the rise of the Internet, which allows them to make continuous, rapid adjustments in ad spending in response to changing economic conditions. What's more, competition from the Internet has forced traditional media companies to implement similar "just-in-time" delivery systems, offering advertising clients quicker turnaround and greater control of campaigns in general.

While the Internet's growth has come especially at the expense of newspapers, all media have been impacted to lesser degrees.

Again MediaPost:

These trends are evident in the rapid growth of online advertising — both in dollar terms and in its share of overall ad spending. While it has experienced huge growth in simple dollar terms, the Internet's percentage share of ad spending has increased even faster, suggesting it is absorbing dollars from other media.  In other words, despite all the talk from publishers about integrated, multiplatform, or cross-channel advertising campaigns (in which online offerings somehow drive traditional media ad sales) it seems online growth has come at the expense of traditional media.

None of this is terribly surprising to anyone who has been following these trends, of course.

But I think it's important to be reminded that this "recovery" will be unlike previous recoveries, thanks in large part to the Internet.

And that difference creates opportunities for broadcasters who recognize these differences, just as it will create disappointment for those who don't.

1 view0 comments


bottom of page