June 14, 2006
Traditional Advertising Revenue Down from Earlier Projections

A report from TNS Media Intelligence released yesterday states that ad spending is not doing as well as originally projected, with ad sales increasing 4.9 percent this year instead of the 5.4 percent in the initial predictions.

On the other hand, the prediction for Internet advertising revenues made in January had severely underrated the power of all the new content being available online to pull in ad revenue, as the prediction was a 9.1 percent increase in Internet ad revenue which has now been revised to 13 percent.

But wait...didn't all the major networks get together several months ago and tell us all that the 30-second spot is more alive than ever? Of course, we can't predict any immediate doom...There's still a pretty sharp price increase, and the biggest loser in ad revenue appears to be ABC, with their attempted move to include DVR viewers, which I posted about last week.

However, this does weaken the stance that the 30-second spot cannot be toppled. WIth the increases in Internet advertising comes decreases in television advertising. Shouldn't come as a surprise, as viewers seem more willing to watch the few ads on most ad-supported video content Internet sites, instead of the many commercial interruptions that have driven so many people to
, DVRs, and other forms of time-shifting and channel surfing.

If it ain't broke, don't fix it...That's what the industry has said. But, maybe it's just a little bit more broke than anyone wants to admit. And there has to come that point where doing something about it becomes a necessity instead of innovative thinking. The increases in product placement, show sponsorships, and various other forms of deviation from the 30-second spot is already showing some alternate routes, even as networks claim the 30-second spot is gaining power instead of losing it.

However, it wasn't clear to me whether the report included any numbers for non-traditional ads like show sponsorships or product placement. Anyone know?

We'll see how this trend in ad spending continues, but it may be even further indications that a change is coming, even if it's coming slowly.