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Media Companies Scoring More Revenue from Online-Only Enterprises

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When online-only businesses first started operating, it wasn’t clear how these marketers would need to promote webretailerthemselves. Could they survive by using only digital promotions, or would they need to turn to traditional media to build their core audience? In a recent Wall Street Journal article, Suzanne Vranica highlights Kantar Media data which shows that while these businesses promote themselves online, TV media companies are scoring some big revenue from online advertisers.

There has been plenty of talk recently about online video being the growth vehicle for the ad industry. And, while that format is generating big interest and revenue, traditional TV is still the top form of advertising.  Online marketers are realizing that the typical consumer spends over 3 hours a day watching TV.

All of the consumer attention directed to TV has convinced several large web-based companies to increase what they are spending on the format. In some cases, it’s about brand recognition. In other cases, it’s about the power of TV to influence consumer behavior, says Grant Langston, eHarmony’s vice president of customer experience.

The companies that have spent over $20 million each on TV advertising this year include Expedia.com., Ancestry.com, Freecreditscore.com, Hotwire.com, EHarmony.com. and Esurance.com.  In total, Kantar Media estimates that web-only companies bought nearly $1 billion of TV advertising through the end of August this year. That number should jump significantly in the current quarter. For example, Wayfair.com, an Amazon competitor, intends to buy $5 million in TV advertising in the fourth quarter.

Analysts expect that marketers will eventually shift more money from TV into online video. But, marketers complain that online video remains expensive and its results are difficult to measure. Until that changes, it seems that even online-only operators will spend a significant portion of the ad money on traditional TV. Are you working with online-only marketers? Have you recommended that they add TV to their media mix?

 

Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-owner of several small businesses in the health care services sector.

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