As we were sipping our coffee and reading the morning news, we came across something profound. In the past nine months, there has been a $3 billion shift from traditional to digital media. Now, we must be thinking the same thing. That’s a lot of cash, where did it all come from?
Standard Media Index, “the global industry standard for actual ad spend data in real-time,” released an analysis that looked closely at the flow of money across major media companies on Madison Ave. Data taken from the first nine months of the 2014-2015 broadcast year (how TV networks account for advertising revenues) showed a tremendous shift from traditional media to digital media.
SMI’s Bee Sutton explained that, “The results show that digital is siphoning share away from other media, with the bulk of it coming from television.” Figures show that digital spending is up 16% ($3 billion), while traditional outlets such as TV spending have fallen by over $1 billion. Because of this drop, it is evident that a hefty portion of digital funding has been provided by TV.
The SMI analysis also estimates about $350 million of digital’s growth came at the expense of “print” media, and about $150 million came out of radio. This information can be seen on the chart below:
So, why are these numbers so important to us? It shows that the industry as a whole is moving away from traditional media and is instead focusing their efforts on organic growth with digital media. What’s even more astounding is that this growth of digital is mainly from traditional budgets. The analysis estimates only about $1 billion of the $3 billion in digital spending was “organic” or new money to be used for digital media. So, presumably the rest came at the expense of traditional media’s budget.
This information is so significant because it isn’t speculation. This information can be pulled from actual booking data by the big ad agencies on Madison Ave. It is definitive proof that traditional media is slowly taking backseat to digital marketing. From a marketing agency just outside The Big Apple’s perspective, we are elated to see that the work we do is being adapted by some of the major players in the industry. We can only hope that this trend continues.
To read the full report, visit Standard Media Index.
What do you think the future of digital media is?
Let us know in the comments below.