Tuesday, February 3, 2015

Boom in online ad dollars - for some

Analyst Gordon Borrell puts the growth rate for online advertising dollars at 40% for 2014, and 42% for 2015.  Some firms could see online ad gains of 30% or more.  But for others, online dollars aren't going to be able to offset traditional advertising losses.

In particular, Borrell noted that newspaper print advertising is looking at continued advertising revenue declines of 10% annually.  Even when adding in the weak growth in online ad revenues for newspapers, total newspaper advertising revenues are predicted to fall 4.8 % in 2015.
Furthermore, the report notes that even in markets where newspapers have strong digital news content, advertisers are shifting to more targeted sites for directed and targeted advertising efforts.

With targeted ads remaining the fastest growing sector, having an audience is not enough - you need to be able to demonstrate having the right targeted audience.  Newspapers have had trouble doing that for their online editions.  In fact, Borrell predicts that online "Internet pure play" sites will grab about three-quarters of local online advertising revenues - mostly at the expense of traditional media outlets.
The report suggests that traditional media strategies towards online advertising tend to fall into one of three basic approaches:
Traditional media companies stuck in the analog world, selling a little digital stuff because it’s easy, but not really believing there’s good money in it; traditional media companies that are more excited about the prospects but still reticent (or unable) to invest more in order to grow quickly; and traditional media companies that have seen the light and are determined to grow again, investing heavily in digital by hiring people or acquiring companies.
Borrell estimates that about half of traditional media outlets fall in the first group - which explains why they're losing out in local advertising markets - which is increasingly focused on highly targeted content and audiences.

Source: Analyst Gordon Borrell sees local digital ads soaring in 2015, but not for newspapers, Poynter.org

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