Digital media to overcome print in US

10 March 2010

NEW YORK: Digital media will take a higher share of advertising revenues than print for the first time in the US this year, according to a report.

Outsell, the research and advisory firm, conducted a survey of 1,008 leading advertisers in America, with its figures covering both consumer-focused and business-to-business brands.

It predicted that total expenditure levels in the country will climb by 1.2%, to $368 billion (€271bn; £246bn), in 2010, as the industry begins to recover from the downturn.

Within this, new media – when taken to encompass everything from online search and internet display advertising to email, "webinars" and mobile – will post an uptick of 9.6%.

This will take digital to a market share of 32.5%, or $119.6bn, compared with the figure of $111.5bn, or 30.3%, which will be recorded by print.

"Advertisers are directing dollars toward the channels which generate the most qualified leads and most effective branding," said Chuck Richard, vice president and lead analyst at Outsell.

"As they emerge from the recession, they need more accountability, and they're spreading their spending over a widening set of options."

Despite the overall trend, conditions are not wholly adverse for print, with magazines set to enjoy an improvement of 1.9% year-on-year, to $9.4bn.

"Marketers are telling us they're giving this print category some serious attention," said Richard.

Elsewhere, the combined ad sales of television, radio and film will contract by 4%, to $86.4bn, in 2010, although broadcast's relative share should improve.

"We should see far fewer closures and cutbacks among traditional media," Richard added.

More broadly, the situation is not even clear-cut for digital, as mobile revenues are likely to slide by 16% on an annual basis in 2010, Outsell warned.

"The proof isn't in yet that mobile spending is all that effective," Richard stated. "It's time for a reality check."

To cite just one example of this, he said that an application produced by Sports Illustrated for its high-profile swimsuit edition was the 33rd most popular paid-for item in Apple's App Store in 2009.

While it cost users $2 to download this offering, and was accessed by 32,000 people, this amounted to just $64,000 in sales, while a single-page ad in the corresponding print issue is valued at $135,000.

Data sourced from Forbes/Outsell; additional content by Warc staff