A HIPPO Internet Marketing Training blog by Corey Creed

The Jungle Map, your guide through internet marketing

Advertising Dollars shifting to Online? Here’s the proof!

August 17th, 2007

For years now, many of have noticed how spending advertising dollars online seems to be a wise choice.  We see the conversion rates of online campaigns.  We try to explain this to others, but it often gets ignored – especially by the big companies and the big marketing agencies.

This week we have some proof.

Silicon Alley Insider provides some big picture hard numbers…

Everyone talks about advertising dollars shifting online, but when you’re fighting all day in the trenches it’s easy to miss the big picture.  Here’s the big picture:

US advertising revenue at 4 big online media companies–Google (GOOG), Yahoo (YHOO), AOL (TWX), and MSN (MSFT)–grew by $1.3 billion in Q2, or 42%. 

US advertising revenue at 15 big television, newspaper, magazine, radio, and outdoor companies (Time Warner, Viacom, CBS, etc.) shrank by $280 million in Q2, or 3%.

Put differently, U.S. advertising revenue at all 19 companies increased 8% year over year in Q2, to $13.8 billion ($55 billion annualized).  The online portion of this pie grew from $3 billion to $4.2 billion (23% share to 30% share).  The offline portion, meanwhile, shrank from $9.9 billion to $9.6 billion (77% share to 70% share).  The online companies, in other words, picked up 7 percentage points of market share in a single year.

Other fun facts:

Within our company set, the only traditional media business that grew U.S. advertising year-over-year in Q2 was Outdoor (up 13%).  Meanwhile:

  • Television (cable and broadcast) shrank 1%, or $50 million
  • Print (magazines and newspapers) shrank 5%, or $170 million
  • Radio (terrestrial) shrank 7%, or $105 million

Here’s the full article.  It’s an amazing read.

Look at the numbers.  Are you spending 30% online?  Don’t miss the boat on this one.  The trend is growing.