us watch_us watch 14/08/2015 10:51 Page 1
Social media now
rules the ad world…
and the real world
Larry Gerbrandt casts his expert eye on the
emergence of social media and its effect on
advertising spend.
comment by a
terrorism analyst
on a US TV news
show about how the
emergence of social media
as a communications
medium has made ISIS a
much more effective
recruiter of followers than
Al Qaeda was
after 9/11 got this
media analyst
wondering: Just
how big a change
has there been
over the last 15
years? In 2002,
only 20% of wired
cable households
equipped with
PCs in the US
subscribed to
high-speed data.
Facebook was
launched by Mark
Zuckerberg in
January 2004.
Twitter followed
in March 2006
and the first
Apple iPhone
appeared in June
2007. Today, all of
these technologies
and services have
evolved to the point of
near ubiquity.
One of the guiding
principles of media is that
advertising spend generally
follows eyeballs. Though there
are a host of factors, such as
demographics and the ability
to create the current Holy Grail
of “engagement” that can affect
media cost as measured in ad
A
rate CPMs, the ability of new
media delivery platforms to
provide instant dissemination of
news and personalised ondemand access to video is
painfully visible when data from
2000 is compared to 2014.
According to SNL Kagan
estimates, advertising spending
on consumer media
(newspapers,
magazines, television,
radio and
Internet/mobile) has
grown from $149
billion in 2000 to
$171 billion in 2014.
The intervening years
US CONSUMER MEDIA ADVERTISING
Year
(mil.)
2000
$149,277
2001
$135,230
2002
$138,954
2003
$143,183
2004
$154,422
2005
$159,781
2006
$167,728
2007
$167,067
2008
$159,444
2009
$134,720
2010
$141,753
2011
$146,673
2012
$156,264
2013
$161,756
2014
$170,984
Source: Analysis of SNL Kagan data.
painfully reflect
the impact of
the digital
bubble bursting
in 2001 and
lingering Great
Recession
following the
global financial
meltdown in
2008, with the
latter wiping out
a full decade of
advertising
growth.
The rise of
digital
communications
can be seen
most visibly in
the mobile and
Internet ad
Larry Gerbrandt
[email protected] has been a
media analyst for more than 25 years with
companies such as Kagan and Nielsen. He
is a principal at Media Valuation Partners,
which provides strategic consulting, research, valuation and
expert witness services and is a managing director of Janas
Consulting, which provides management consulting,
valuation and investment banking services.
sectors, which comprised just
6% of the total in 2000 but now
represent a full 25% of all US ad
spend. Most of this has come at
the expense of daily
newspapers (dropping from
36% to a 15% share), radio
(from 13% to 10%) and
magazines (from 8% to 5%).
Below the macro shifts in ad
budgets is a much more powerful
technological hand, and it is what
brands, from retail chains to
ISIS, are exploiting: the shift
from mass media to niche and
personal media. Information that
once was disseminated through a
relative handful of channels and
daily newspapers have been
replaced by a viral network of
blogs, tweets, Facebook postings
and texts, the equivalent of
millions of channels all bounded
only by bandwidth and the speed
of light.
The challenge is that media
technology is morally neutral.
The great irony is that the
wiring of the world with
geosynchronous satellites and a
web of underwater fibre optic
cables and cellular towers has
left us both more connected
and more divided than ever
before.
EUROMEDIA 25