By Mark Farmer, ACA

Posted April 3rd, 2009

Data-mining the PriceWaterhouseCoopers Global Entertainment and Media Outlook: 2008-2012, I discovered some nuggets of information that are just begging to be shared – it’s interesting what you discover when you take a closer look….

The big picture
In the “no surprise” category, Internet advertising’s growth is the big story and has been for years, but it’s illuminating to look at the top six advertising media by sales in 2003 vs. 2012:

Everything stays the same except for the elephant that saunters into the room: Internet advertising becomes the #1 ad medium three years from now, coming from nowhere to the top of the pack in less than a decade. It’ll continue to churn ahead at 21% annual growth for the next four years, which is a decline from its rate over the last four, but hey: 50% growth is tough to sustain.

The most overlooked segment in the report is in-game video game advertising, which will be worth $255 million in 2012, and looks set to crack the top eight media in a few years. Not bad for something that didn’t even exist a decade ago.

But the most interesting story has to be radio and out-of-home advertising, which are set to post their strongest growth in years thanks to new technologies such as hi-definition & satellite radio, 3-D & digital displays and in-store networks. The radio market will see 11% annual growth to 2012, and out-of-home 7%.

Online advertising
Video & ‘other’ online ads will lead growth in the online market from 2008-12 at 40%. Classified ads clock in next at 22% growth, followed by search at 21% and display at 14%.

The big trend here is search overtaking classifieds last year and continuing to dominate straight through to 2012. In spite of its high growth rate, video will remain a niche player for the foreseeable future.

Mobile: the new frontier
Mobile internet access is going to disappoint at only 50% growth this year. That’s going to be a letdown for aficionados, who saw 100% growth last year. Luckily it will rebound to 67% next year – I think we can all breath a sigh of relief at that.

Now take a minute and put those percentages in real terms and an even more compelling picture comes into focus: this means two million wireless surfers last year, three this year and five next. That’s the equivalent of adding almost the population of Alberta to the advertising pool over the next two years.

TV
Get set for DVRs (Digital Video Recorders) to take off – they’ll be in 22% of households this year and almost 45% by 2012, which is going to have a huge effect on advertising space as more Canadians gain the ability to time shift and skip ads. Check out Bob Reaume’s take on the impact of DVRS and Video on Demand on TV advertising for more info.

Growth in specialty channel advertising will continue to outpace terrestrial advertising, but interestingly, it won’t clobber terrestrial the way it has for the previous five years. However, high-definition channels are starting to cut into specialty channel advertising and will continue to do so.

Magazines
Consumer & trade magazines face a declining readership, even as readers move to their online components. Luckily, that shift online will buoy digital ad spending by an average of over 40% per year for 2008-2012. Magazines’ focus is shifting from growing print circulation to the online market, and reduced circulation and fewer readers per copy will reduce advertising growth in print.

Be aware that magazine publishers are starting to use mobile advertising as their mobile sites come online over the next couple of years – this promises to be an innovative revenue stream for them.

Newspapers
Circulation will continue to putter along, helped by their websites, but free circulation papers are going to continue to take a bite out of traditional ones – free dailies constituted 32% of newspaper circulation in 2007. The silver lining for big dailies is that the free commuter daily market has more or less reached a saturation point.

Ad growth will be almost nothing in print, but do quite well online: compare a 0.4% annual growth rate for print ads vs. 24% digitally. However, dailies are facing the double-whammy of classifieds migrating online and a drop in job ads due to the recession.

Radio
A bit brighter picture here: new stations and hi-definition broadcasting will provide a significant lift over the next several years for the medium.

Advertising collectives, which aggregate and sell ad time across markets, also helped propel national radio advertising to 8% growth in 2006-07, and will drive strong ad growth over the next several years.

High-definition broadcasting and the switch to FM (yes, there are still AM stations switching over) will also help growth.

Out of Home
Digital billboards, 3-D displays and in-store video are set to revolutionize out-of-home and breath new life into the medium: it’ll grow by 7% in 2009-10 and 7.5% in 2011-12.

In the “Oh my GOD, just like Minority Report!” category, Eyebox2, a new eyeball tracking mechanism, will allow advertisers to measure how long people spend on an ad, and potentially when and what parts of it they view.

- Mark Farmer
- Communications Specialist

Mark is responsible for the ACA’s electronic communications and bringing the world of Web 2.0 to its membership. He is the founder and ‘chief webhead’ at webness.biz, and has worked in the fields of corporate communications, web design and social media since 1995. Mark currently sits on the advisory committee for multimedia programs at Humber College, and is a member of the Society for New Communications Research.