My newspaper friends tell me that 2006 hasn’t been a great year, at least in terms of advertising. No wonder, with $600 million in auto advertising going away and total ad sales down 3.9 percent from January through June.
Those grim numbers were released this week by the TNS Media Intelligence. Overall, advertising dollars spent in the United States in the first half of the year climbed 4.1 percent — less than the 4.5 percent TNS predicted.
If newspapers took declines, who got the increases?
Look no further than the Internet where display advertising rose 18.9 percent in the first six months of 2006.
Neilsen/Net Ratings earlier released a report saying Internet ad spending grew by 49 percent during the first half of the year, leading all other media.
Total spending on Internet advertising was $4.69 billion, compared with $3.9 billion in the same period in 2005.
Internet advertising now accounts for 6.4 percent of the $73 billion spent on advertising in the first half of the year, TNS Media Intelligence said.
TNS Media Intelligence CEO Steven Fredericks predicted that the growth rate of Internet ad spending will continue to accelerate as major advertisers pick up the trend toward the Web.
“Once the top 50 advertisers start to shift more of their dollars, the growth rate of the Internet could increase,” he said. “…(A)s it becomes more apparent and transparent regarding proof-of-performance, they’re becoming more comfortable and you’ll start to see dollars shift (to the Web).”
MarketWatch reported that newspapers' total advertising fell to $11.65 billion, down 3.9 percent. Radio was down 1.4 percent to $5.26 billion. Those numbers showed that the Internet is rapidly closing in on total radio advertising spending. If the trend continues, Web advertising well could pass radio next year and start closing in on newspaper advertising. Network TV was up 5.7 percent to $12.28 billion, and Spanish language media rose 20.5 percent to $2.4 billion.
Internet advertising is trendy, newspaper advertising stoggy. Ad agencies are moving money to the Web. The top 50 advertisers are moving money to the Web. Realtors are moving money to the Web. Local merchants are asking for Internet solutions. Employers are spending their recruitment dollars more and more online.
Auto dealers — well, no one really knows what they’re doing in their upside-down world.
Overall, the trends aren’t great for printed newspapers.
It’s not all grim news.
Online newspapers continue to grow. The local online newspaper is usually the No. 1 most-visited local Internet site. Newspapers can “own the Internet” in their markets.
Newspapers that leverage this position are finding it easy to grow their Web revenues, including classifieds, auto, employment, special sections, banners, big ads, and other online products.
Obviously, newspapers that have resisted Web sales efforts don’t do as well as papers that aggressively have pursued Internet sales. Some newspapers “own” the Internet in their markets but don’t even know it. A friend of mine noted that his company’s Internet products were growing tremendously, and asked: “I wonder if our advertisers know the value of this reach?”
Advertisers can hardly be expected to know about the newspapers’ great Web reach if the newspapers’ sales staffs don’t “get it.” We need to believe in our online products, then spread the word to our advertisers and readers.
Newspapers have the first right of refusal to “own the Internet” in their trade areas. As the advertising numbers show, this is an increasingly valuable franchise to own.