Friday, January 23, 2015

Research: Four Types Of Digital Media Companies Emerging

Borrell Associates has released a new report, "2015 Outlook: Local Digital Advertising," in which it examines digital advertising, separated into four basic formats: display, streaming, e-mail and paid search. This year, total local advertising is forecast to grow to $115 billion, up 11.3% over 2014. Digital advertising is forecast to reach $47.8 billion, accounting for two-fifths of all expenditures.

According to Borrell, digital advertising at the local level will grow 42% this year. At that rate it would account for $2 out of every $5 spent by local advertisers. It’s grown to the level of dominance that newspapers enjoyed for years, until the late 1990s.

Four types of companies are forming:
  • Traditional media companies stuck in the analog world, selling a little digital stuff because it’s easy, but not really believing there’s good money in it 
  • Traditional media companies that are more excited about the prospects but still reticent (or unable) to invest more in order to grow quickly; 
  • Traditional media companies that have seen the light and are determined to grow again, investing heavily in digital by hiring people or acquiring companies.
  • Internet “pureplays,” and there are thousands of them. True to predictions, they have gobbled up share at the local level. In 2015, these independent companies will account for nearly three-fourths of all digital advertising, elbowing out local-media competitors who have tried for two decades to use their existing sales forces to also sell digital advertising.
Click to Enlarge
According to the report, traditional print and broadcast media are still a significant market force. At the end of 2014, they accounted for more than two-thirds of all advertising buys. But, digital has gained share faster than another 'new medium' over the past century. It took radio 25 years to peak at a 15% share of all advertising by the late 1940s, and it took television 34 years to peak at a 22% share. Digital exceeded both of those markers in 12 years.

The report found that only four traditional radio companies grew more than the industry average, including Cumulus, Univision, Salem Communications and Pandora.

No comments:

Post a Comment