NEW YORK This year will mark the first time in U.S. history that broadcast television gets more advertising dollars than newspapers, according to a new study.
If the prognostication from Veronis Suhler Stevenson is correct, broadcast TV will be the No. 1 advertising medium in the country, knocking newspapers from the spot they have held since the late 18th century, the start of such record-keeping.
However, the TV networks ought not get too complacent — three years from now, the Internet will take over as the leading generator of advertising revenue, VSS says.
According to VSS, a media private-equity firm, Internet advertising will boast a nearly 19 percent compound annual growth rate from 2007-12, compared with just over 2.5 percent growth for broadcast TV and a 2.8 percent decline for newspapers.
Last year, newspapers took in $51.5 billion in advertising revenue compared with $48 billion for broadcast TV. But this year, with a boost from the presidential race and the Olympics, TV will spike to $51 billion while newspapers sink to slightly less than $47 billion.
And once newspapers relinquish their lead, they aren’t expected to regain it any time soon.
Meanwhile, broadcast TV should sink in 2009 after the political and Olympic surge. It will then resume growth, but the gains won’t be quick enough to hold off the Internet for long.
In 2011, the top three U.S. advertising media should break down like this: $60 billion for the Internet, $51 billion-plus for broadcast TV and about $44 billion for newspapers.
Of course, it’s not all gloom for TV, newspapers and other Internet competitors because they have their own online strategies.
That’s why VSS breaks down the Internet into two categories: “pure play,” such as Yahoo! and Google, and “traditional,” like ABC.com and NewYorkTimes.com. Only when the two are added together will they claim the top spot by 2011.
This year, pure-play Internet will claim $21.9 billion in advertising revenue, 20.5 percent more than a year earlier.
Traditional Internet, while smaller, is growing faster than pure play, according to VSS. Traditional this year should claim $14.1 billion in U.S. advertising revenue, 28.3 percent more than a year earlier.
“They were further behind, but they got their acts together,” VSS managing director Jim Rutherfurd said. “They have strong brands that are revenue-generating machines.”
Overall, the advertising industry is expected to increase about 2.5 percent this year in the U.S. to $218 billion.