Four years ago, an article in the Wall Street Journal suggested Internet advertising would match magazine advertising by 2007 and blow past it in 2008. What happened?
The very short version: During 2007, almost $60 billion was spent on advertising that appeared in print while $11.31 billion was spent on advertising that appeared on the Internet.
The very long version: I don’t expect any readers of this weblog to remember a four-year-old rant I wrote (and here) about a Wall Street Journal article appearing in July, 2004. Screen grabbed on the left, the WSJ story carried the headline “Online Ad Dollars Set to Match, Then Go Ahead of Magazines (sub. required).” The article was based on a Jupiter Research report predicting that in 2007, Internet advertising spending would grow to $13.8 billion which, claimed the Wall Street Journal, “would match magazine advertising.”
My rant, which later became an article appearing in Folio: Magazine, was directed more at the Wall Street Journal reporter’s mis-interpretation of the research than it was at the Jupiter Research report. Their prediction was not really a comparison of Internet advertising to magazine advertising, merely their estimate of online advertising spending through 2007 and beyond. It was the Journal reporter who decided to mashup a comparison of future Internet advertising (based on Jupiter’s numbers) and its magazine number estimate.
However — and this was a major focus of my rant — the reporter (and Jupiter) failed to recognize that the Internet advertising prediction included all online advertising while the magazine advertising prediction excluded all business-to-business magazine advertising.
In my response to the article, I suggested that a better prediction of 2007 magazine ad spending would be the 2004 estimate by Veronis Suhler that $28.3 billion would be spent on magazine advertising (consumer and B-to-B) in 2007.
Fast-forward four years. Today, Advertising Age issued a report that included the actual ad spending (split by media) in 2007. As you can see in the Advertising Age pie chart below, $11.31 billion was spent on Internet advertising and $30.33 billion was spent on magazine advertising. Throw in the $28.22 billion spent on newspaper advertising and there was nearly $60 billion spent on print advertising last year.
Let’s break this down a bit. Let’s look at a comparison of the 2004 predictions vs. actual performance from Jupiter Research and Veronis Suhler regarding Internet and magazine advertising. As you can see on my comparison below, Jupiter over-shot their Internet advertising prediction while Veronis-Suhler undershot their magazine advertising prediction.
(Granted, Jupiter Research’s prediction during the most recent four-year span was dramatically better than their 1999-2003 prediction. In 1999, they predicted that online advertising in 2003 would total $11.5 billion compared to the $6.6 billion it actually hit.)
What does this mean? First, it means, (to quote a wonderful headline I saw this morning) “90% of all statistics can be made to say anything 50% of the time.” No doubt, the statistics in today’s report can be spun any way you want. I’ve spun them one way. Most bloggers would spin them in a way that suggests they are another nail in the coffin of the print medium. Frankly, the way headlines and intro paragraphs will be written can make most any statistics imply whatever you want — at least 50% of the time.
As for me, personally: I love Internet advertising. Without a doubt, it’s growing faster than any other form of advertising and I, personally, am benefiting from that. In 15 years, it has grown from zero to $11.3 billion, an amazing feat. However, my complaint is with the misuse of numbers by reporters and tech-oriented analysts — and, to be honest, just about everybody I know — to support a narrative that can be summed up in three words: Print is dead. As much as I love the Internet and all things digital, that narrative is probably not going to be true in the lifetime of anyone making that prediction.
Today’s narrative — as it was back in 2004 and 1999 and 1954 when TV was going to kill print and radio and movies — is that the Internet is going to bury all other forms of media one day. Today’s narrative is that Internet advertising is growing at a far larger percentage (which even a middle-schooler should understand is easier to do when you have a lower base on which to grow). Today’s narrative is that newspapers are going to be dead in, what, a year of so? Certainly, they won’t last for an entire decade, goes the narrative. According to Steve Ballmer, “…there will be no media consumption left in 10 years that is not delivered over an IP network. There will be no newspapers, no magazines that are delivered in paper form. Everything gets delivered in an electronic form.” (He later said he could be off on the number of years, claiming, “…If it’s 14 or if it’s 8, it’s immaterial to my fundamental point . . . “
Of course, he also said the iPhone would flop.
Personally, I am doubtful about the longterm viability of the kind of print product the national chains of newspapers produce. Outside the sports section, I find little of value or interest to me in my hometown daily churned out by one of those national chains. And as I’ve said many times on this blog, I think many business-to-business print publications that focus merely on the transactions of their industries will be replaced by online properties that can provide a better, more timely flow of such information.
So, yes, I do think print will constrict while the Internet grows — over time. But die? Not likely.