Henry Blodget, a former Wall Street Internet analyst brings out a very telling analysis of where companies' marketing investments are shifting:
- US advertising revenue at 4 big online media companies--Google (GOOG), Yahoo (YHOO), AOL (TWX), and MSN (MSFT)--grew by $1.3 billion in Q2, or 42%.
- US advertising revenue at 15 big television, newspaper, magazine, radio, and outdoor companies (Time Warner, Viacom, CBS, etc.) shrank by $280 million in Q2, or 3%.
Put differently, U.S. advertising revenue at all 19 companies increased 8% year over year in Q2, to $13.8 billion ($55 billion annualized). The online portion of this pie grew from $3 billion to $4.2 billion (23% share to 30% share). The offline portion, meanwhile, shrank from $9.9 billion to $9.6 billion (77% share to 70% share).
Within our company set, the only traditional media business that grew U.S. advertising year-over-year in Q2 was Outdoor (up 13%). Meanwhile:
- Television (cable and broadcast) shrank 1%, or $50 million
- Print (magazines and newspapers) shrank 5%, or $170 million
- Radio (terrestrial) shrank 7%, or $105 million
Media power is not only shifting by medium (the handful of Internet companies are collectively valued more highly than most of their traditional media brethren combined), but by geography. Most "big media" companies are still headquartered in New York. Most media power, however, is now headquartered in California.
The spreadsheet tells you the story in a little bit of more details. The trend is expected to be similar across geographies. The ones among publishers, marketers and agencies who transform very quickly will be the ones who will survive this onslaught.
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