Local media
outlook: Declining dollars
Forecast sees a drop in ad spending even with recovery
By Heidi Dawley
Mar 3, 2009
In past recessions local advertising followed a familiar cycle, sinking during economic downturns, then rising back up as the economy regained its oomph. As local merchants saw more faces in their stores they returned to advertising in the area's media outlets.
That's not going to happen this time.
In this recession local ad spending will not spring back when the economy improves, at least not in terms of dollars spent.
Merchants will return to spending but there will be a shift to lower-cost media--read the internet here--from traditional media such as newspapers.
Eventually, dollar levels will return but it could be years out, presumably as those less expensive media options attract ever-larger numbers of new advertisers who could never justify spending on traditional media.
That's the reading of a new forecast from BIA Advisory Services and its Kelsey Group division, a research outfit that specializes in local media.
Here are some numbers: In 2008, local media saw $155.3 billion in spending. But that number will tumble this year and for the coming several years struggle back as the economy recovers. But even five years out, in 2013, local spending will still be below 2008 levels, at a forecasted $144.4 billion.
“It could take a long time to get back to $155 billion,” says Neal Polachek, CEO of Kelsey Group. He reckons it could take until 2015.
The shift to online media is driven by a number of factors, and lower real and out-of-pocket costs are just part of it. Another big factor, long realized by national marketers, is the higher accountability, which allows marketers to track results and cut spending that's not producing results.
According to the forecast, local spending on the internet and other digital media is expected to more than double in the five-year span of the forecast period, from $14.0 billion in 2008 to $32.1 billion in 2013, for an average annual growth rate of 18 percent. Within digital media, mobile, including search and display, will be a big gainer, growing to $3.1 billion in 2013 from just $160 million last year.
Over that same period, traditional media is forecast to decline from $141.3 billion to $112.4 billion, for a pace of negative 4.5 percent. That in turn will lead to a huge growth in the share of local ad dollars claimed by digital, from 9.0 percent in 2008 to 22.2 percent by 2013.
The effect of the recession will simply be to accelerate the pace of change at which local advertisers shift from traditional to new media. “For the media it will be a very different world when we come out," says Mark Fratrik, vice president of BIA Financial Network.
“If you are traditional media and you are thinking that as soon as the recession is over the glory days will be back, well, it isn’t going to happen,” says Polachek.
***
Meanwhile, in online ratings for the week ended Feb. 22, according to Nielsen Online, Google was the top parent company, followed by Microsoft, Yahoo, AOL and News Corp. Online. The top five brands were Google, Microsoft, Yahoo, AOL and News Corp. Online.
Vonage Holdings was the top advertiser with 1.7 million impressions, while Medifast was No. 2 at 1.4 million. Yahoo was the top advertising site with 16.3 million ads served, with MSN No. 2 at 2.3 million.
Sessions per person per week were even to last week at 17, as were domains visited per person at 41. PC time per person was down 1.7 percent from the previous week to 19 hours and 8 minutes.
|
Top 25 parent companies
Through Feb. 22
|
|
#
|
Parent
|
Unique Audience (000)
|
Reach %
|
Time Spent per Person (hh:mm:ss)
|
|
1
|
Google
|
103,817
|
70.1
|
0:39:01
|
|
2
|
Microsoft
|
92,092
|
62.2
|
0:50:13
|
|
3
|
Yahoo!
|
82,666
|
55.8
|
1:11:53
|
|
4
|
AOL LLC
|
50,048
|
33.8
|
1:34:21
|
|
5
|
News Corp. Online
|
44,296
|
29.9
|
0:37:28
|
|
6
|
Facebook
|
36,264
|
24.5
|
1:09:36
|
|
7
|
eBay
|
35,072
|
23.7
|
0:54:07
|
|
8
|
InterActiveCorp
|
29,894
|
20.2
|
0:09:53
|
|
9
|
Amazon
|
29,574
|
20.0
|
0:12:44
|
|
10
|
Apple Computer
|
28,817
|
19.5
|
0:10:51
|
|
11
|
Turner Network (Time Warner)
|
28,266
|
19.1
|
0:37:25
|
|
12
|
Wikimedia Foundation
|
26,399
|
17.8
|
0:18:56
|
|
13
|
New York Times Company
|
24,388
|
16.5
|
0:11:16
|
|
14
|
Walt Disney Internet Group
|
23,616
|
15.9
|
0:18:15
|
|
15
|
CBS Corporation
|
23,367
|
15.8
|
0:07:32
|
|
16
|
Landmark Communications
|
21,730
|
14.7
|
0:13:02
|
|
17
|
AT&T Inc.
|
18,473
|
12.5
|
0:18:37
|
|
18
|
Glam Media
|
15,115
|
10.2
|
0:40:31
|
|
19
|
CraigsList
|
14,869
|
10.0
|
0:10:29
|
|
20
|
Comcast Corp.
|
14,693
|
9.9
|
0:21:49
|
|
21
|
Verizon Communications
|
14,621
|
9.9
|
0:20:43
|
|
22
|
Scripps Networks Interactive
|
14,414
|
9.7
|
0:10:13
|
|
23
|
RealNetworks, Inc.
|
14,064
|
9.5
|
0:26:42
|
|
24
|
Gannett
|
13,739
|
9.3
|
0:20:30
|
|
25
|
General Electric
|
13,299
|
9.0
|
0:06:14
|
|
Source: Nielsen Online
|
|
Top 25 brands
Through Feb. 22
|
|
|
Parent
|
Unique Audience (000)
|
Reach %
|
Time spent per person (hh:mm:ss)
|
|
1
|
Google
|
95,320
|
64.3
|
0:28:23
|
|
2
|
Microsoft
|
81,677
|
55.1
|
1:12:19
|
|
3
|
Yahoo!
|
68,264
|
46.1
|
0:52:26
|
|
4
|
AOL LLC
|
61,028
|
41.2
|
0:16:52
|
|
5
|
News Corp. Online
|
50,048
|
33.8
|
1:34:21
|
|
6
|
Facebook
|
42,033
|
28.4
|
0:26:34
|
|
7
|
eBay
|
36,870
|
24.9
|
0:37:31
|
|
8
|
InterActiveCorp
|
36,264
|
24.5
|
1:09:36
|
|
9
|
Amazon
|
28,579
|
19.3
|
0:10:54
|
|
10
|
Wikimedia Foundation
|
28,266
|
19.1
|
0:37:25
|
|
11
|
Apple Computer
|
27,691
|
18.7
|
0:55:41
|
|
12
|
CBS Corporation
|
23,662
|
16.0
|
0:12:12
|
|
13
|
Walt Disney Internet Group
|
21,472
|
14.5
|
0:17:29
|
|
14
|
New York Times Company
|
20,982
|
14.2
|
0:09:17
|
|
15
|
Turner Network (Time Warner)
|
19,926
|
13.5
|
0:07:49
|
|
16
|
Landmark Communications
|
18,328
|
12.4
|
0:13:16
|
|
17
|
AT&T Inc.
|
15,759
|
10.6
|
0:03:21
|
|
18
|
RealNetworks, Inc.
|
15,115
|
10.2
|
0:40:31
|
|
19
|
Verizon Communications
|
14,693
|
9.9
|
0:21:49
|
|
20
|
Comcast Corp.
|
14,414
|
9.7
|
0:10:13
|
|
21
|
CraigsList
|
13,960
|
9.4
|
0:22:29
|
|
22
|
General Electric
|
11,587
|
7.8
|
0:19:49
|
|
23
|
Time Warner (not inc. Turner Network)
|
9,821
|
6.6
|
0:03:20
|
|
24
|
Scripps Networks Interactive
|
9,729
|
6.6
|
0:35:39
|
|
25
|
Bank of
America
|
9,588
|
6.5
|
0:07:55
|
|
Source: Nielsen Online
|
|
Top 25 advertisers
(excludes house ads)
Through Feb. 22
|
|
#
|
Company
|
Impressions (000)
|
|
1
|
Vonage Holdings Corp
|
1,736,407
|
|
2
|
Medifast, Inc.
|
1,435,315
|
|
3
|
AT&T Corp.
|
1,296,174
|
|
4
|
FreeScore.com
|
1,017,407
|
|
5
|
Netflix, Inc.
|
963,023
|
|
6
|
United Online, Inc.
|
870,076
|
|
7
|
Deutsche Telekom AG
|
822,090
|
|
8
|
Toyota Motor Corporation
|
740,902
|
|
9
|
Scottrade, Inc.
|
729,324
|
|
10
|
Experian Group Limited
|
719,467
|
|
11
|
Social Concepts, Inc
|
711,251
|
|
12
|
CoolSavings, Inc.
|
706,878
|
|
13
|
Verizon Communications, Inc.
|
697,167
|
|
14
|
Intuit, Inc.
|
607,533
|
|
15
|
Mate1.com
|
480,511
|
|
16
|
True
|
468,684
|
|
17
|
Time Warner Inc.
|
436,531
|
|
18
|
E*TRADE FINANCIAL Corp.
|
420,429
|
|
19
|
PepsiCo, Inc.
|
393,625
|
|
20
|
NexTag, Inc.
|
386,931
|
|
21
|
InterActiveCorp
|
385,710
|
|
22
|
eBay, Inc.
|
385,614
|
|
23
|
Sprint Corporation
|
377,758
|
|
24
|
TaxACT
|
366,031
|
|
25
|
Colorado
Technical
University
|
288,309
|
|
Source: Nielsen Online, AdRelevance
Note: Nielsen Online, AdRelevance service estimated online advertising expenditures account for CPM-based image-based advertising. All reported estimated expenditures and impressions do not account for the following placement types: text only, paid fee services, performance-based campaigns, sponsorships, barters, in-stream ("pre-rolls") players, messenger applications, partnership advertising, promotions and email campaigns. AdRelevance currently does not report estimated spending for paid search advertising. Also, Nielsen Online, AdRelevance reporting data reflects advertising activity served on pages accessible via the World Wide Web and not within AOL's proprietary service.
|
|
Top 25 advertising sites
(excludes house ads)
Through Feb. 22
|
|
|
Company
|
Impressions (000)
|
|
1
|
Yahoo!
|
16,304,396
|
|
2
|
MSN
|
2,287,364
|
|
3
|
FOXNEWS.COM
|
1,672,668
|
|
4
|
AOL.com
|
1,457,477
|
|
5
|
Facebook
|
787,431
|
|
6
|
The Weather Channel
|
739,721
|
|
7
|
MySpace
|
602,737
|
|
8
|
eBay
|
541,301
|
|
9
|
YouTube
|
448,942
|
|
10
|
CNBC
|
420,254
|
|
11
|
ESPN.com
|
380,251
|
|
12
|
New York Times
|
378,992
|
|
13
|
Home & Garden Television
|
368,963
|
|
14
|
Amazon
|
356,148
|
|
15
|
Juno
|
334,803
|
|
16
|
Comcast.net
|
331,818
|
|
17
|
CNN Money
|
301,569
|
|
18
|
IMDb
|
295,007
|
|
19
|
NeoPets
|
228,227
|
|
20
|
Charter.net
|
220,772
|
|
21
|
Pogo
|
216,786
|
|
22
|
Photobucket
|
197,874
|
|
23
|
Drudge Report
|
193,279
|
|
24
|
CNN
|
172,174
|
|
25
|
MSNBC
|
167,994
|
|
Source: Nielsen Online, AdRelevance
Note: Nielsen Online, AdRelevance service estimated online advertising expenditures account for CPM-based image-based advertising. All reported estimated expenditures and impressions do not account for the following placement types: text only, paid fee services, performance-based campaigns, sponsorships, barters, in-stream ("pre-rolls") players, messenger applications, partnership advertising, promotions and email campaigns. AdRelevance currently does not report estimated spending for paid search advertising. Above data does not include any house advertising activity. Also, Nielsen Online, AdRelevance reporting data reflects advertising activity served on pages accessible via the World Wide Web and not within AOL's proprietary service.
|
|
Average use
Through Feb. 22
|
|
|
Current Week
|
Last Week
|
% Change
|
|
Sessions/Visits per Person
|
17
|
17
|
0
|
|
Domains Visited per Person
|
41
|
41
|
0
|
|
PC Time per Person
|
19:08:37
|
19:28:43
|
-1.72
|
|
Active Digital Media Universe
|
145,474,674
|
144,367,638
|
0.77
|
|
Current Digital Media Universe Estimate
|
230,015,986
|
229,978,749
|
0.02
|
|
Source: Nielsen Online
|
|
|
|
