From Internet Outsider
According to IAB, online advertising spending in the UK in 2006 exceeded newspaper advertising spending. This amazing fact received less attention in the U.S. than it should have.
One of the big mysteries of the past few years, for those who follow U.S. media, is how and why U.S. newspapers have been able to maintain as much share of the advertising market as they have. Yes, business sucks for newspapers, but it doesn’t suck as much as it should when one considers that the vast majority of the product is printed on wood pulp, shipped around the country in gas-guzzling trucks, and then tossed into recycling bins before it is even glanced at.
According to Morgan Stanley figures for 2005, U.S. newspapers still generate about $49 billion in advertising revenue (including classifieds). This compares to about $16 billion last year for Internet, $45 billion for broadcast television, and another $19 billion for cable TV.
Unless there is something structurally different about the UK market–please weigh in on this if you know–the UK statistic suggests that 1) the US online advertising market still has massive growth ahead of it, and 2) U.S. newspapers have not yet begun to feel the pain.
Two scenarios jump to mind: 1) Online advertising triples over the next 5-10 years, to $50 billion, and/or 2) Online advertising doubles and newspapers advertising gets cut in half. And then, of course, there’s 3) Online advertising triples AND newspaper advertising gets cut in half.
Either way, if Citizen Kane were just starting out today, he’d be choosing a different business.
Top Gaining Stocks
Top Losing Stocks