Online advertising overtakes TV advertising

26 Nov 2009

The technology press has been joined by the blogosphere, twittersphere, and social-networks-sphere in heralding the news from the UK that online advertising spend has overtaken TV advertising spend for the first time, a good 12 months ahead of predictions. And whilst everyone is commenting on the clear sea change that this represents, I can’t help but wonder if the research has revealed an even more important underlying trend that has gone unnoticed.

The research carried out by PricewaterhouseCoopers (PwC) in conjunction with the Internet Advertising Bureau in the UK (IABUK) reports that online advertising spend grew 4.6pc in the first half of 2009 compared with the same period in 2008, whilst TV spend shrank 16.1pc, meaning that for the first time ever online’s £1.75 billion sterling spend trumps TV. Justin Pearce, editor of New Media Age, is one of many who celebrated this milestone arriving at least a year sooner than many experts predicted.

Crying foul

On the other side of the debate, Thinkbox, a marketing body for UK commercial TV broadcasters, immediately cried foul. Arguing that online advertising spend is made up of a range of disparate channels, including email, classified adverts, display ads and search marketing, they said the good people of PwC and IABUK weren’t comparing like with like. And it is this further observation that contains what for me is the real change dynamic illustrated in the figures.

All of TV’s £1.7-billion advertising spend is traditional interruption marketing, involving identifying a target demographic, targeting a time/programme/station where they are gathered, and interrupting their viewing with an advert. Online’s £1.75 billion is broken into search (63pc), classified and email (19pc), and display advertising (18pc); thus 82pc of online advertising is permission based, or at least behaviourally based. Surely this leaves us not with the narrow conclusion that TV advertising is on a terminal downward slope, but the wider conclusion that interruption marketing is on an unstoppable decline?

Online vs television

If the discussion is limited to the thin confines of online versus TV, the TV executives can point to the ready availability of faster, cheaper broadband, e-commerce sites slashing high-street costs, the online multimedia and video revolution and the measurability of the medium. They can take comfort, citing the recession as contributing to people looking for a bargain online and spending more time online rather than going out.

However, once the debate tackles the big question about the changing nature of consumer expectations around corporate communication and how they understand brands in an online world, they may have more uncomfortable questions to answer. If the recession is to blame, then TV advertising will recover when the economy recovers. If the recession is merely an accelerator then TV will have to acknowledge that its reducing revenues are not the cause, but rather a symptom of the fact that interruption marketing is in decline, and that the patient is not going to recover.

Gareth Dunlop is managing director of the Belfast- and Dublin-based internet agency Tibus. Their customers include Emergency Planning Society, Irish FA, FAI, Irish Internet Association, Business and Leadership, Lidl, and Marketing Institute of Ireland.

Photo: Gareth Dunlop

Read more by Gareth Dunlop:

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Gareth Dunlop runs Fathom, a UX consultancy that helps organisations get the most from their digital products.