Online Advertising Will Overtake Magazine Advertising

Gary Stein, a senior analyst at JupiterResearch, addressed the state of the online advertising industry today, and analyzed how the market will grow over the next five year at the recent Search Engine Strategies conference in Chicago. He also introduced Niki Scevak, another JupiterResearch analyst, who discussed the forecast models that are driving the numbers presented in the session.

Stein began with a look at the advertising numbers.

“The U.S. online ad market is surging,” he said. Online ad spending has increased from $3.5 billion in 1999 to $8.4 billion in 2004, and is projected to grow to $16.1 billion in 2009.

During the past year, online ad growth has significantly outpaced other media. Spending on Internet advertising increased 27% from 2003 to 2004, while cable advertising increased 14.1%, broadcast TV advertising was up 8.2%, radio advertising was up 7.0%, magazine advertising increased 5.0%, newspaper advertising increased 4.8%, and Yellow Pages advertising was up 3.2%.

According to Stein, “Online advertising will overtake magazine advertising in 2007” – when total online ad spending hits $13.8 billion, or 6.0% of off-line ad spending.

Read full article here as reported on Search Engine Watch.

So what does that mean living in one of the most connected cities in the world? In terms of overall usage, the Internet is outperforming magazines, however in terms of ad spend, Calgary is behind the numbers listed in the US. My conclusions here are looking at the advertising profiles of the major magazine companies, their rate card and number of advertisers based on the number of Calgary businesses advertising online.

Why are Calgary businesses not adopting Internet advertising even though we are one of the most wired cities in the world?

Are businesses really afraid of the Internet? Afraid of what, actually getting positive results on their advertising spend. Are Calgary businesses so accustom at spending advertising dollars without really looking at the value they receive in return. As business owners are we really more concerned with seeing our ad in paper as opposed to online that we simply won’t accept the reality of the changing marketplace!