Traditional Advertising on the decline
Will traditional advertising survive 2010?

Reaching records in depressed times sometimes distorts the true picture within the realm of statistical data.

Although the overall media budgets saw a small decline in 2009 (3.4%) due to a lackluster second and third quarter media spending, the fourth quarter 2009 almost wiped out the shortfalls of the two prior quarters (increase of 14.4% over the 3rd Q 2009) reaching $6.3 Billion.

More revealing however is a mega shift in media spending. The biggest losers are Newsprint, Magazines and TV while Digital Video Advertising saw a rocket like increase of 39%.

Overall the media budget pie consisting of Television, Radio, Newsprint, Consumer Magazines and Internet saw almost double numbers for internet budgets within one year (increase from 9 to 17%) and an ever shrinking budget in the traditional offline budgets with Newsprint and Consumer Magazines being hit hardest.

“Search Kings” still in the lead but Digital Video is giving them a run for their money

The lion share of the online media budget still is in the hands of the “search kings” Google, Yahoo and Bing with about 47% or some $10.7 Billion for the year 2009 while display related online media such as banners, rich media and digital video reaching a 35% or almost the $8 Billion mark while online classifieds are taking a big hit being down almost a Billion dollars over 2008 (4% decline) while e-mail based advertising is rapidly vanishing from the revenue table losing 50% of its revenues in 2009.

The tidbit of shrinking online Classifieds revenues

Almost unnoticed within the numbers of the Interactive Advertising Bureau (IAB) are the online classifieds revenues. In itself the information doesn’t stand out but when placed in the light of Newpapers offering online revenue generating classifieds to make up for the   precarious to disastrous situation many newspapers find themselves in with declining traditional advertising revenues, the indicator becomes rather the second tidal wave of destruction.

Moreover when placed in the light that Facebook and Twitter have not yet put a real claim of their share on the online revenues, and that is expected to change in 2010, we’ll foresee a rapid declining reason for financial existence of newspapers and commercial magazines.

Facebook is gearing up to take the magazine advertising role while looking at the road map and some first indications in the Twitter revenue model through their expanding services, our bet is that Twitter is best positioned to take the lion share of the “classifieds” revenues next to other Digital Media resource income streams leaving the online classifieds income streams for Newspapers literally empty handed.

This demise could literally happen overnight with a daisy chain like effect on editors, journalists, advertising sales reps, printing plants, ink manufacturers, paper mills all the way down to the newspaper delivery boys that once where the success stories such as Media Tycoon Rupert Murdoch living the American Dream.

From Corporations all the way down to small business owners are getting the message that you “need to fish where the fish are” and right now the average American spends twice as much time online immersed in digital media and reading blogs than watching TV.

Do you think that we will see a further decline in Radio and TV revenues and thus more reruns by this time next year. Let us know your opinions.