The good folks at IAB recently confirmed internet advertising passed TV for top spot in advertising revenue in the US.  Not exactly a surprise; if it wasn’t this year, it would surely have been next.  My current students, born around the time of www launch, have heard every single year of their lives how the internet is killing TV (along with all other media). I imagine they would be one of the few surprised by IAB’s results: “what, it wasn’t already #1?”

It struck me this year more than most how increasingly irrelevant this competitive media channel ranking is. It doesn’t matter if the bucket called “internet” is bigger than the bucket called “broadcast TV” when everything is online – including all of our other offline channels.  I want the internet unpacked to reveal its juicy bits; the relevance is in its parts, not the whole. Consider how video advertising crosses online, mobile (tablet), broadcast and cable. The ‘bucket’ internet is a huge one, but the online and mobile parts hidden inside were the most relevant bits this year.

How Big Is Big?

Internet advertising grew 17% to elbow past Broadcast Television. That’s huge, especially in an otherwise relatively flat marketplace and reflects increased experimentation with mobile and on-line video. Internet and TV are *each* $40 billion dollar industries in the US and the slacker of the Digital Broadcast Landscape, cable TV, slides in at third with almost $35 billion.  The big three lock up just under 70% of the ad budgets in the US compared with roughly 60% of Canadian budgets. (2012)

 

IAB 2013 US Share of Advertising Revenue: The breakdown of revenue by medium sparks this question: When is a TV ad not a TV ad?  When it's an on-line video ad airing in a streamed TV show.

IAB 2013 US Share of Advertising Revenue: The breakdown of revenue by medium sparks this question: When is a TV ad not a TV ad? When it’s an on-line video ad airing in a streamed TV show.

Unpacking the internet’s 1st place rank

Internet includes all forms of on-line and mobile advertising – display, search, video, apps, pages – with the greatest growth in retail, mobile and on-line video.  This is similar to the realities in Canada.  Although our mobile market lags the US (lots of room for growth!) and we’ve always spent fewer hours watching TV, Canadians are heavily invested in digital with page views and time spent only rivaled by the Brazilians. In 2012 Canada, TV captured 31% share of ad dollars followed closely by the internet at 28%.  It’ll catch up in 2013 and look for more gains in 2014. Recent changes to data and internet packages (not reflected in IAB’s soon-to-be-released 2013 Canadian rankings) allow Canadians to more freely squander bandwidth to view video and use their phones as media devices.  Heck, we’ve adjusted to carrying the equivalent of a second mortgage (or half the cost of a basement apartment in Toronto) just to pay the ‘tech fee’ each month – so naturally we want to stream Netflix on our tablet.

When is a TV ad not a TV ad? When it’s an on-line video ad airing in a, umm, TV show online. Digital’s big jump reflects improvements in video streaming and video ad placement which encouraged more advertisers to use online video last year.  Clients have been slow to move TV money into online video. Certainly, they’ve used digital budgets to experiment with on-line video, but have largely left the big TV budgets alone.  Until last year.   Competitrack’s Online Video Ad Tracking service reported 20 brands spent more than $10 million on online video in 2013.

Web video creation is one of the big growth areas in digital. This isn’t the death of TV. In true ‘media-neutral’ fashion, consumers don’t care if it is a webisode or an episode – they don’t want the device to define the medium.  If one follows their eyeballs, does it matter if the ad is seen on a screen called a TV or another one called a tablet? Consumers clearly want the convenience:  Canada isn’t far behind the US where half of US adults are  ‘always addressable’– using at least three connected devices and accessing the web multiple times per day from varying locations. Can’t see Bell or Rogers’ complaining about increased consumption of their content (along with the rest of the web) on multiple devices either.  My dad would’ve said they were collecting “new money for old rope.”

Now, if we can only be assured the ads are viewable (more on that in a future post).

‘Year of Mobile’ finally arrives

Marketers have been predicting the ‘Year of Mobile’ for at least the last decade. It finally arrived in 2013.  I bought my first smart phone in 2012 (I live a block from work – this was truly research,  not need) and immediately figured out one reason mobile wasn’t growing as fast as marketers thought it should: 2012 mobile was like the dark, wild terrain of 1995 internet – unfriendly to navigate without a direct address. Apps fill that need nicely, which is why it’s such an app driven medium. But it had better be worth the battery drain.  Sales of tablets, chromebooks and smartphones over 4” continue to grow as connected Canadians consume ever more (formerly) traditional and emerging digital media through mobile devices.  Rogers and Bell are packaging content and data plans with an eye to this market.  Mobile is on a high growth trajectory with apps, retail, online video and cross-channel campaigns leading areas in 2014.

IAB 2013 Internet share of advertising revenue: growth driven by budget shifts to mobile and on-line video advertising.

IAB 2013 Internet share of advertising revenue: growth driven by budget shifts to mobile and on-line video advertising.

 

TV viewership hasn’t declined – it’s actually doing very well.  What’s altered is how we watch it –the viewing audience is scattered across multiple screens.  That’s not going to change.  Maybe it’s time to call TV Tele-Video and be done with the channel comparisons.  It’s not the channel, it’s the viewer.

How do you think TV will be redefined as it follows the eyeballs in the Digital Broadcast Landscape?

IAB’s most recent studies are found here (US study used in this report) and the latest Canadian report (IAB 2102) here.