Marketers to Shift Promotions to Lower Cost Media Formats

Marketers are back to spending on advertising. Projected spending on major media formats could reach $154.6 billion in the U.S. in 2011.  That spending level, from eMarketer, represents a 1% increase over last year. While any increase is welcome after the serious and sustained economic contraction we’re pulling away from, the spending in the individual media formats that make up these numbers deserves a closer look, especially by marketers who are planning next year’s budget.

Few research shops agree exactly on projected advertising spending levels. As eMarketer analysts note, the projections are based on many sources, benchmarks and estimates.  If eMarketer’s model is right, the spending by media channel will look something like this by the end of the year:

  • TV: $60.5 (in billions)
  • Internet: $25.8
  • Newspapers: $21.4 (print only)
  • Radio: $15.7 (excludes off air and digital)
  • Directories: $8.2 (print only)
  • Magazines: $13.9
  • Outdoor: $6.4

In reviewing eMarketer's numbers, Diego Vasquez points out that the projected 2015 spending level of $173.6 billion will still fall short of the 2007 spending level of $187.1 billion (as measured by eMarketer). The firm’s analyst, Nicole Perrin, agreed with Vasquez, who writes for Media Life Magazine, about the root cause of this shortfall. The sharp drop in traditional print advertising spending cannot be replaced revenue-​wise with increases in online advertising formats.

Marketers are finding that they can spend much less on online marketing yet still achieve significant reach and come away with solid data regarding ROI. While marketers are scrambling to find the right media mix and media companies are hurrying to offer cross-​channel platforms, the numbers still aren’t in on all forms of online marketing. The cost to reach thousands of consumers through an online display campaign might be less expensive than a traditional print campaign, but some marketers are finding that administering a social media promotion is far more labor intensive. If that is the case, predictions about cost savings for online promotions may deserve a second look.

[Sources: Perrin, Nicole. Behind the Numbers: US Major Media Ad Spending. Emarketer​.com. 6 Apr. 2011. Web. 11 Apr. 2011; Vasquez, Diego. Media’s seismic shift. Medialifemagazine​.com. 5 Apr. 2011. 12 Apr. 2011] 
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.