DMN3 Blog

Television ad spending reflects the fact that television is still king of the mountain for all of the important criteria used by marketing professionals in placing advertising dollars. The question is, “How long will it last?”

Television is the most popular medium in the United States and is number one in influencing consumers buying behaviors. So says Deloitte’s Fifth Edition State of the Media Democracy, a survey of 2,000 U.S. consumers ranging in age from 14 to 75 conducted in the Fall of 2010.

Deloitte's survey is just one of the latest of many surveys showing television as the leading medium by far for both popularity and its influence on the purchase process.

Given that, it’s no wonder why marketers continue to spend more than twice as much on television advertising as they do on the next largest advertising medium, Internet advertising. Television advertising grew by 13.1 percent worldwide in 2010 compared to 2009 according to Nielsen. U.S. television advertising grew by 9.7 percent in 2010 to $59 billion and is projected to reach $60.5 billion in 2011. While ad spending is still below pre-recession ad spending, television is on its way back to pre-recession spending levels.

How long will television advertising dominate the spending of marketing dollars? It depends…

Indeed, television advertising took a significant hit during the recession while online advertising continued to grow significantly. The rise of digital video, decline in time spent in traditional TV viewing and DVRs, TiVo (time shifting) has also muddled the landscape for television advertising.

All of this has led to a lot of forecasting of the demise of television advertising as the dominant medium. The Interactive Advertising Bureau published a study this month showing that most marketers and advertising agency professionals plan to shift TV ad spending to digital video advertising. According to the survey, digital video ad spending will grow to 15 - 19 percent of their total online advertising budgets.

It’s no secret that online spending for advertising will continue to grow dramatically. The question is whether we will see a decline in television advertising as a result of this growth.

In a report recently released by eMarketer, the answer is “no.” According to eMarketer, television advertising revenue has been largely unaffected by the continued growth of online advertising. The report suggests that the growth of online ad spending has come at the expense of other media, including local directories, magazines and newspapers.

They project that television ad spending market share will hold steady at between 39 and 40 percent through 2015 with spending reaching $68.0 billion. During the same time period, Internet advertising’s share of total ad spending is expected to increase from 16.9 percent in 2010 to 25.6 percent in 2015 with ad dollars totaling $44.5 billion.

So while television continues its dominance over the next few years, we are seeing the face of television change as we know it. That means that traditional television as we have known it will give way as the dominant advertising platform.

Television is being transformed and the distinction between broadcast and cablecast TV and the Internet is disappearing. Google, Apple and television set manufacturers are connecting our living room television sets to the Internet. The result is that television sets are becoming media hubs that blur the line between live and on-demand television programming and web-based programs and applications.

I will leave it to others who measure ad spending to figure out how to classify ad spending in this kind of scenario.