For news publishers, there's no doubt that the digital age has well and truly arrived. eMarketer published a report in January predicting that online advertising spending in the United States will overtake print this year.
Spending on online ads in the US grew by 23% last year, totaling $32.03 billion, estimates eMarketer. The company, which provides analysis of internet market trends based on its own assessment of ad selling companies' reported revenues as well as on data from other industry sources, predicts that online ad spending will grow another 23.3% this year, to reach $39.5 billion.
Meanwhile, US print advertising, which totaled an estimated $36 billion in 2011, is expected to drop to $33.8 billion.
eMarketer forecasts a significant rise in online ad spending over the next five years; it predicts that by the year 2016, online ad spending will total $62 billion in the United States, and that print spending will drop to $32.3 billion.
Compared to other industry analysts, eMarketer's predictions are high, yet all forecast a meaningful rise in online ad spending in the coming years.
eMarketer hones in on the consequences for newspapers and magazines. It predicts that for US newspapers, online ad revenues will rise by 11.4% to $3.7 billion, while print ad revenues will drop 6% in 2012 to $19.4 billion. eMarketer forecasts a continuing decline in ad revenue at US newspapers over the next five years, from an estimated $24 billion in 2011 to a predicted $21.5 billion in 2016.
The news is brighter for magazines, where print revenues are actually expected to rise by 0.5% to $15.4 in 2012, then remain more or less steady over the coming five years. Online ad spending in US magazines is expected to grow by a whopping 19.3% this year to total $3.3 billion, after having grown 18.8% last year. eMarketer predicts overall growth in magazine advertising revenues over the next five years.
David Hallerman, principal analyst at eMarketer, explains that US consumers' increased use of digital platforms and the fact that ad companies can measure their activities more closely online, have helped fuel the growth in online advertising. Hallerman states that, "advertisers' comfort level with integrated marketing is greater than ever".
Digital ads offers another possible advantage to advertisers. An article in TabTimes last month reported that according to the marketing and media research firm Affinity, readers tended to respond much more to ads in iPad editions of magazines than in the printed version. Managing director of Affinity Tom Robinson said that iPad mag readers were much more likely to follow through on an ad by downloading an app, following a link or making a purchase, than equivalent print readers. Robinson credited "interactivity of the tablet environment" for this difference.
"Digital obviously offers more opportunities to respond with the interactivity, the links built in, the videos, and that is directly reflected in the fact that we're getting higher reader ad effectiveness scores on the digital side," he stated.