Is Online Advertising Effective?
by Angela Taylor
In the last ten years, the Internet has become one of the dominant media in the United States. One of the most striking ways that this can be illustrated is in the way that consumer consumption of other basic media has changed since the rise of the Internet. A Forrester Research report asked Internet users which activities they were spending less time doing in order to spend time at their computers. Their choices were: Watching television, Eating and sleeping, Performing Chores, Reading Books, Reading Magazines, Reading Newspapers, Outdoor activities, Exercising, Playing video games, or None. About a quarter of the people polled (24%) said they were giving up eating or sleeping to spend time on their computer. But by far the biggest activity surrendered by the respondents was television viewing, which was given up by 78% of the people polled.
A study from The Georgia Institute of Technology's Graphic, Visualization and Usability Center asked people about their television viewing habits and about the effects that Internet use had on them. The study's findings showed a clear shift in media habits with more than one third of respondents saying that they "use the Web instead of watching TV on a daily basis."
Television viewing has declined overall in the last several years as well. 2000's Nielsen's February ratings sweeps found one million fewer U.S. households viewing television during prime time versus the same period last year. A study released at about the same time by Nielsen and CommerceNet stated that the North American online audience had doubled in the past 18 months. When viewed together, these two reports show a distinct trend away from television, currently the most popular media in the United States and towards the Internet.
So people who advertise on the Internet are reaching more and more people every day. And they are reaching the kinds of people that advertisers crave the most. Numerous polls and studies have found that Internet users are more educated than the general population, with 75% of Internet users having graduated from college as opposed to 45% of the population, according to a study by the Media Futures Program of SRI Consulting. The same study claims that the average Internet user has a household income of $60,800 and that 65% of Internet users have a household income of $50,000 or more (as opposed to 35% of the general United State population). So the average Internet-connected consumer has more disposable income to spend on advertisers' products than the average consumer, which draws more advertisers to the media.
This is one of the main reasons that companies have begun to set aside so much of their marketing budgets for Internet advertising. The other reason, aside from the fact that it reaches large numbers of desirable consumers, is that it is at least as effective as advertising through other forms of traditional media. A single exposure to a banner advertisement ad 200% more of a branding impact on a test group than a single exposure to an advertisement in a magazine or on television, according to a study by Millward Brown International.
Online sites top newspapers for Americans—report
By Chris Lefkow
First Posted 09:30:00 03/15/2011
Filed Under: Internet, Newspaper & Magazines, Advertising, Television, Infotech, mobile phones
WASHINGTON—More Americans are getting their news from the Internet than from print newspapers for the first time as audience figures for cable news programs fall, according to a report released on Monday.
The State of the News Media 2011 report by the Pew Project for Excellence in Journalism said that in another first, online advertising revenue topped that of print newspapers last year.
Forty-six percent of Americans now get news online at least three times a week, surpassing newspapers (40 percent) for the first time, the report said.
"People are spending more time with news than ever before," the report said. "But when it comes to the platform of choice, the Web is gaining ground rapidly while other sectors are losing."
It said only local television news is a more popular platform than online news sites with 50 percent of Americans citing it as their top news destination.
The audience for cable television news declined substantially in 2010, the report said, with the median viewership falling by 16 percent to an average of 3.2 million in prime-time. CNN's median prime-time viewership fell 37 percent to 564,000 viewers. Evening network television news audiences fell by 752,000 viewers, or 3.4 percent, from 2009, but network TV news still attracted an average audience of 21.6 million people.
Print newspaper circulation continued to decline in 2010 with weekday circulation down five percent and Sunday circulation falling 4.5 percent. Print newspaper advertising revenue fell 6.4 percent in 2010 from the previous year to $22.8 billion while newspapers made an additional $3 billion from online ads.
"For the first time, more money was spent on online advertising than on print newspaper advertising," the report said. Online advertising grew 13.9 percent overall to $25.8 billion in 2010 according to figures from eMarketer.
Circulation revenue for newspapers is expected to be flat or down marginally in 2010, the report said, after falling 10 percent from 2003 to 2009.
Despite sliding print ad revenue and circulation, newspapers "generally are still operating in the black," the report said, with profit margins around five percent.
On the job front, the report said US newspapers "trimmed only marginally in 2010" after cutting nearly a third of their staff in the previous decade.
"We estimate losses of about 1,100 to 1,500 people, or three percent to four percent," it said.
Online news outlets, meanwhile, are hiring, the report said, citing AOL, Yahoo! and The Huffington Post, which was purchased by AOL for $315 million.
Meanwhile, the number of ad pages sold across the magazine industry overall was flat in 2010 (down 0.1 percent) after steep declines in 2008 (11.7 percent) and in 2009 (25.6 percent), the report said. While fewer Americans are reading print newspapers, more are using their cellphones and tablet computers like Apple's iPad to get local news and information.
Forty-seven percent of Americans use cellphones or tablet computers to get information on local weather, restaurant listings, local news and sports scores and traffic conditions, the report said. But only 13 percent of mobile device owners are using applications, or apps, to tap into local information, the report found, and just 10 percent of that group pays for an app -- amounting to just one percent of the total US adult population.
"Many news organizations are looking to mobile platforms, in particular mobile apps, to provide new ways to generate subscriber and advertising revenues in local markets," said Lee Rainie, director of the Pew Research Center’s Internet & American Life Project.