The Financial Times headline:
Online ads to overtake US newspapers
The story:
The rapid growth of online advertising is expected to see the sector overtake US newspaper advertising in terms of size by 2011.
The forecast comes against a backdrop of declining advertising sales reported by newspaper groups this year in spite of continued strength in the US economy.
The findings are from a widely-watched annual research report on the media sector by Veronis Suhler Stevenson (VSS).
In the 2007 study, published on Tuesday, VSS forecasts that online advertising will grow by more than 21 percent per year to reach $62 billion in 2011, making it bigger than newspaper advertising, which is expected to total $60bn in 2011.
“The path of online advertising and newspaper advertising is a continuation of what we’ve been observing for many years, but it is finally getting to the point where the lines will cross,” said James Rutherfurd, managing director at VSS.
The VSS forecasts also illustrate the lag between changes in consumers’ behaviour and advertising spending.
The survey also measured the time spent on different media, and in 2007 the amount of time spent reading newspapers is expected for the first time to be overtaken by time spent online.
Spending by companies on information and media, including business-to-business magazine and trade shows, is also increasing, up 8.1 per cent in 2006 to $227 billion.
“Knowledge and information industries drive the US economy, meaning that information is a critical tool,” said Mr Rutherfurd.
“Companies are prepared to pay a lot of money to get that information.”
Good news if you are in the informartion business.
Bad news if you are in the newspaper printing business.
(Thanks to Michael Agar in London)
