8/12/07

Consumers Switch to Digital (Mediaweek)

Katy Bachman

AUGUST 08, 2007 -

For the first time in a decade, consumers spent less time with media in 2006 than they did the prior year according to a study released Tuesday by Veronis Suhler Stevenson. Media usage per person declined 0.5 percent to 3,530 hours driven by “the continued migration of consumers to digital alternatives for news, information, and entertainment,” the study concluded. (So digital isn't media?)

“We are in the midst of a major shift in the media landscape that is being fueled by changes in technology, end-user behaviors and the response by brand marketers and communications companies,” said James Rutherfurd, executive vp and managing director at VSS. “We expect these shifts to continue over the next five years, as time and place shifting accelerate while consumers and businesses utilize more digital media alternatives, strengthening the new media pull model at the expense of the traditional media push model.”

As a result, spending on alternative advertising, including Internet, mobile, videogames and digital out-of-home, among others, grew 36.6 percent to $26.53 billion in 2006. Traditional advertising spending, however, grew only 2.4 percent to $183.21 billion.

“Leading national advertisers have accelerated their diversion of dollars from traditional print and broadcast media to alternative digital platforms to combat media and audience fragmentation, increased consumer control and multitasking, and the growing impact of advanced technology on conventional media models,” Rutherford said.
  • Compared to traditional media, digital alternatives require consumers to invest less time. Consumers typically watch broadcast or cable TV at least 30 minutes per session, compared to the five to seven minutes spent viewing video clips online.

  • Consumers are also migrating away from advertiser-supported media, such as broadcast TV and newspapers to subscription platforms, such as cable TV and videogames, the study found.

  • Time spent with consumer-supported media grew 19.8 percent in 2006, while time with ad-supported media fell 6.3 percent.
VSS forecasts the fastest-growing media segments over the next five years will be pure-play Internet and mobile services, branded entertainment, out-of-home media, outsourced custom publishing and public relations. Total Internet advertising is expected to reach $61.98 billion in 2011, surpassing newspapers as the nation’s largest ad medium.

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