US Internet advertising spending is all set to outpace radio advertising for the first time, reminding broadcasters that now they need to be more forceful in their grip of online opportunities. According to eMarketer’s recent report, online advertising spend is expected to reach $21.7 billion by the end of 2007, scaling up 22 per cent from last year. At the same time, radio advertising spend is expected to mark just $20.4 billion, an increase of just 1.5 per cent on 2006. eMarketer further projected, ‘By 2011, online ad spending will reach an estimated $44.0 billion, nearly double radio ad spending of $22.6 billion’.
The Internet advertising first surpassed outdoor in 2000, when revenues totaled $8 billion, compared to $5.24 billion for outdoor. Outdoor advertising has been a successful story with 8 per cent annual growth rates, however trails the Internet, with total revenues of $6.8 billion in 2006, versus $16.9 billion for online.
eMarketer said in the report, ‘while not signaling the death of radio, it is an indication that radio is being subsumed into a broader sector called ‘audio,’. Additionally, a separate report released earlier this year by Arbitron and Edison Media Research has said, ‘only 17 per cent of US consumers consider radio the most essential medium, down from 26 per cent five years ago’.
The report once again turned the spotlight on the Internet’s importance; online revenues are a key growth area for radio. eMarketer’s Ben Macklin speaking over the issue said, ‘various kinds of Internet advertising will be ‘principal drivers for radio advertising growth’ in future.’
