A new study on media proliferation, prepared for its glittering Fortune 500 clientele, has been delivered by business consultancy McKinsey & Co. Its content does not make cheerful reading for America's conventional TV broadcasters.
The report's main thrust is that by 2010, traditional TV advertising will be only one-third as effective as it was in 1990. This is partially due to an assumed 15% decrease in buying power triggered by cost-per-thousand rate increases.
Other factors are a 23% decline in ads viewed due to watchers literally switching off; a 9% loss of ad engagement caused by increases in multitasking; and a 37% saturation-induced reduction in message impact.
But this is not the whole of the sob story. "You've also got pronounced changes in consumer behavior while they're consuming media," warns McKinsey director Tom French. "And ad spending is decreasingly reflecting consumer behavior."
In real terms ad spending on primetime broadcast TV has increased over last decade by about 40% - despite a fall in viewing levels of almost 50%. Paying more for less creates a significantly higher cost-per-viewer-reached, a trend also reflected in radio and print.
Many technological factors have contributed to these changes over the past sixteen years - and will continue to do so at an accelerated rate over the next four years.
Among the historical influences on TV viewing are cable, PCs, cellphones, CD players, VCRs, game consoles and the internet. More recent - and future - determinants are PDAs, broadband nternet, digital cable, home wireless networks, MP3 players, DVRs and video-on-demand.
Forrester Research's most recent North American Consumer Technology Adoption Study shows people in the 18-26 age group spending more time online than watching TV. They are adopting new technology faster than any other generation, making them more receptive to advertising via blogs, podcasts and web-cellphones.
All of which poses a key question. Should consumer marketing mixes change to reflect consumer behaviour?
Not yet - according to McKinsey, which posits a 'Catch 22' situation.
A "chaos scenario" based on a dearth of online-ad supply and the web's generally fragmented nature will keep TV in relatively robust health for the next several years, the report opines.
While McKinsey's Amy Guggenheim Shenkan asks the rhetorical question: "Should everybody shift 30% of their dollars to the web?"
And is ready with an equally rhetorical answer. "No!"
"There wouldn't be room today if everybody wanted to shift online. Last year [online spending] was $12.5 billion (€9.7bn; £6.55bn), by end of 2007 [it] will be $18-$25 billion. So we're seeing a lot of growth, but if you want to match up share of attention and share of dollars it couldn't happen for that reason."
French posits that it's no longer good enough for advertisers to take standard reach metrics at face value. Instead they should be evaluating media on an "adjusted reach" basis.
"What we don't find [marketers] doing is adjusting those reach numbers for people who are actually tuned in. Not just watching but actually paying attention."
The key, argues French, lies in the hands of chief marketing officers who "have to step up to a larger role and question a host of historical assumptions of how marketing works.
"They have to continue to build rich, robust and proprietary customer insights, but they have to do it from a bunch more sources."
Data sourced from AdAge (USA); additional content by WARC staff