Features

Showdown Looming Between TV and Online

Written on
Dec 16, 2010 
Author
Ariel Geifman  |

samurai_smallADOTAS – Since its adoption after the Second World War, TV has reigned supreme, dominating users’ time spent, and luring advertising dollars. Now, for the first time, users are spending more time online, than in front of their tube.

New research by Forrester shows that in 2010, Americans spent 13 weekly hours online, in addition to spending slightly less than 13 hours watching TV—almost four hours daily between the two.

One of the interesting findings of the Forrester research is that the increase in time spent online is not coming at the expense of TV. In fact, time spent watching TV has remained more or less the same over the past five years, while time spent online grew by 121%.

As the length of the day remained exactly the same in the past five years, something has to give. Forrester’s analysts found that the losers are the usual suspects—newspapers, magazines and radio. Time spent reading newspapers declined by 26%, time spent on magazines declined by 18% and time spent listening to the radio declined by 15%.

Nevertheless, the rise of online seems not as the story of the decline of other media, but a story of transformation, where TV, paper and terrestrial radio are becoming bits and bytes.  If you are reading The New York Times online, are you reading a newspaper, or are you online?  What about online radio and video?  It seems that more than users changing their media consumption patterns, researches need to change the way that they measure media.

For example, according to a survey by the Boston Consulting Group that was quoted by eMarketer, 68% of online users spend at least some time watching video online. With sites like Hulu and services like Netflix gaining more ground, the Internet may be just another way to watch TV. In the same survey, 70% of users reported reading news and 34% listening to music online.

This is just the tip of the iceberg.  With the iPad and other tablet devices becoming ubiquitous more and more media will become digital. Just look at the pace at which magazines and newspapers are offering IPad apps.

It seems that while consumers are quick to adapt, advertisers are more skeptic. In contrast to the equal time spent on the two media, advertisers tend to spend almost two and a half times more on TV advertising than on online advertising, according to a global estimate by PwC for 2010.

The new evidence from Forrester is not likely to dent advertisers’ willingness to spend more on TV, as Sir Martin Sorrell, the head of WPP told The Economist in a recent interview:

“The irony that WPP’s strength this year owes much to an ad boom in America rather than in emerging economies, and in conventional media, with television advertising making a strong comeback, does not escape him. But Sir Martin explains this is happening because a lot of clients are building their brands and feel this sort of advertising is better done with traditional media whereas ‘online is more about price and offering a deal.’”

Is this about to change?  Let the showdown begin…





Ariel Geifman is the principal research analyst at MediaMind. In his role, Ariel provides insights and analysis to the online advertising community on industry trends, advertising effectiveness and performance benchmarks. He’s authored numerous reports that were widely quoted throughout industry blogs and publications including eMarketer, Mediaweek, Adotas, iMedia, DM New, and eConsultantcy among others.

Prior to MediaMind, Ariel worked as a management consultant specializing in marketing effectiveness and optimization, helping Fortune 500 companies improve their marketing and sales operations. He holds an MBA from the Darden Graduate School of Business at the University of Virginia. Ariel can be reached at ariel.geifman@mediamind.com.

Reader Comments.

I think the insight that Internet is not taking time away from TV is, on its own, a valid one; research from MultiMedia Mentor has shown for years that people are more often adding media time to accommodate Internet, rather than trading one medium for another. But the idea that people spend only 13 hours a week watching TV flies in the face of tons of other research; it is simply not believable.

Posted by Dave S. | 4:04 pm on December 16, 2010.

Hi Dave,

I think that people were able to add Internet time above other media, is due to the ability to use it at the office, or at times where other media cannot be consumed. However, at some point, Internet would have to start cannibalizing other media.

Ariel

Posted by Ariel Geifman | 1:45 am on December 19, 2010.

I agree,

I already started watching most of my TV content online via Pc \ Mobile.

Posted by Guy | 9:30 am on December 22, 2010.

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