Online Ad Spending Surpasses Broadcast TV, But TV Execs Insist the Sky is Not Falling

SAN DIEGO - May 5, 2014 - PRLog -- San Diego, CA,  May 5th, 2014 - Advertising veterans knew the day would come when internet advertising revenues would surpass ad sales for broadcast TV.  According to a new report by the Interactive Advertising Bureau, the day has arrived and now direct response experts in both television and online wonder what the milestone means for both mediums and the ad industry in general.

According to the IAB report, advertisers spent $42.8 billion on internet advertising last year in both desktop and mobile channels.  That’s a nearly 17% increase from 2012.  During the same period, advertisers spent $40.1 billion on broadcast television ads.

While the demand for broadcast TV advertising is clearly outpaced by the internet, ad industry executives meeting in San Diego at Direct Response Expo 2014 were quick to point out that broadcast and cable television combined generated $74.5 billion in ad revenues.

“Obviously, there is still a huge opportunity for advertisers in both cable and broadcast,” said Scott Kowalchek, President of DirectAvenue, a media buying company attending the San Diego trade show.  “What these numbers tell us is that every ad campaign should be managed across screens.  There are no pure TV commercials anymore. Commercials must be repackaged in different formats for desktop, laptop, IPad and smart phone distribution”, said Kowalchek.  “The Broadcast TV commercial isn’t dead but it’s going through a fundamental change to meet the needs of a fundamentally different audience.”

The IAB report underscores the fact that people spend more time on their computers and mobile devices than they do watching television.  TV networks are responding by slowly moving their shows online because fans - in growing numbers – view their shows on multiple screens,  blurring the lines between TV advertising and online advertising.

Trade show attendees like Kowalchek were surprised to see the staggering growth in mobile advertising last year at $7.1 billion, which was 100% more than advertisers spent on mobile ads in 2012.  “Just a few years ago, ad buyers meeting at the San Diego show would have laughed at the suggestion that billions of dollars a year would be spent to advertise on the tiny screens you see on cell phones,” said Kowalchek.  “No one is laughing now.”

As consumers spend more of their time on smartphones, tablets, and other mobile devices in 2014, direct response advertisers who face a fundamental change in the industry, a change that will require every agency to delivery TV ads on much more than TVs.