Note: This article was updated on July 6th, 2020 to reflect more up-to-date information.
According to Mashable, internet ad spending beat broadcast TV for the first time in 2013.
This was a landmark milestone for digital marketing. Traditional advertising (TV, Radio, Billboard, Newspaper, Magazine) had always accounted for the lion’s share of advertising revenue.
It’s interesting to think about the different ways we consumed media before the internet was what it is today. Before we had Instagram ads and Google ads, where did we learn about products and companies we were interested in? Many of you reading this article are probably old enough to remember the days of marketing pre-internet. In 2001, Google’s advertising revenue was 7 million dollars, and that number slowly rose throughout the early 2000s. Where else did we consume media? Some examples include television, newspapers, magazines and radio. Let’s look at how things have changed from the beginning of the century to 2013 when internet finally beat broadcast TV. [source]
- In 2000, about 116 billion dollars were spent on advertising on television. In 2013, that number was around 175 billion dollars.
- In 2000, about 107 billion dollars was spent on newspaper advertising. In 2013 that number was about 72 billion dollars.
- In 2000, about 46 billion dollars was spent on magazine advertising. In 2013 that number was about 32 billion dollars.
- In 2000, about 30 billion dollars was spent on radio advertising. In 2013, that number was about 31 billion dollars.
- The biggest jump of all is internet- in 2000 about 8 billion was spent on internet ads, and in 2013 it was 103 billion.
According to Statista, TV advertising is expecting to lose about 4.3 billion dollars, while internet advertising on mobile platforms is expected to gain 90 billion dollars in 2022. How did the internet become the giant that was able to pass television advertising in revenue in 2013?
The internet was officially “invented” in 1983, but it became more user-friendly and recognizable around the 1990s. In the late 1990s, the potential of the internet was overbid by investors, and they were wary of the unknown and risky platform when the 2000s came about. [source] This later came to be known as the dot com bubble, a period in which there was a rapid rise in stock in technology fueled by internet-based companies, and the “bubble” eventually burst as companies that were highly invested in went to market without generating revenue or profits. How did the internet go from a revolutionary tool and technology to the biggest advertising platform in the world?
- The first advertisement on the internet in 1994 was a banner ad that read “Have you ever clicked your mouse right here? You will.” The way it worked was very different from the pay-per-click model we’re familiar with now; banner ads in this time were paid for upfront to occupy space on the website for a specified period of time, rather than the number of users who engage with the ad. According to The Atlantic, the click-through rate for the first banner ad was 44%- very different from today’s average of 0.06%. [source]
- As internet advertising continued to progress, in 1995 we saw the revolutionary beginning of targeted ads online, which allowed advertisers to begin to refine their audiences and show the ads to users that fit their target demographics.
- In 1996, tracking tools began to make an appearance as a way to help advertisers report on how their ads actually performed. At the time, this was done through a service called D.A.R.T (Dynamic Advertising Targeting & Reporting).
- By 1997, the pop-up type ads that we know as a bother today made their appearance, only to quickly fall as browsers evolved to include pop-up blockers.
- Between 1999-2002, pay-per-placement techniques were introduced, only to evolve to pay-per-click measures that we know and use today. By 2000, Google AdWords came on the scene, and have only continued to increase in usage today.
- In the early 2000s, social networking began to take flight in the online world, and marketers wanted a way to reach their audiences in a more targeted way. This led to social giant Facebook working with marketers to create targeted ads to their audience in 2006, and it has only gone up from there.
Related Article: Top 8 Marketing Quotes from David Ogilvy, the Father of Advertising.
With the increase in popularity of social media sites like Facebook, Instagram and YouTube along with the everyday use of search engines like Google, it was only a matter of time before internet ad spend beat traditional, especially on mobile platforms like apps.
In 2013, Internet advertising accounted for $42.8 billion in revenue versus $40.1 billion for broadcast television [source]. It should be noted that in 2013, TV still accounted for the bulk of U.S. ad spending. When you combine broadcast and cable television together, it accounted for $74.2 billion, far more than internet ad spend. The future continued to point toward increased ad spend for digital and social media.
Related article: What Did I Do Before Social Media?
In all honesty, it was a matter of time before digital spend outperformed traditional media, specifically television. With the tracking mechanisms that are in place with internet advertising and analytics at the disposal of all marketers, businesses can easily gauge the return on investment from their online ad spend. Instead of hearing the old sales pitch from the TV station rep that “the campaign needs to run its course” and that it is “helping with branding,” internet advertising can have an immediate impact with keyword targeting and remarketing strategies at an affordable price.
I am not saying that television advertising is dead by any means. Every client is unique and has different platforms where its advertising campaigns can succeed. A successful TV campaign cannot only generate more business; it can have a direct correlation to an increase in branded search terms and social references. I’ve experienced this firsthand with campaigns for large brands. If you are not a large company and are looking for an outlet to invest for marketing, I would suggest taking the digital route after consulting with an agency.
Digital ad sales in the U.S. hit $42.8 billion, up 17% from 2012, according to data compiled by PricewaterhouseCoopers and released by the Interactive Advertising Bureau. Search revenue remains the leader with a little less than half the market.
As an advertiser, it’s possible to still find usefulness in each and every platform to target different audiences and demographics, depending on the objectives of your business. If you’re looking to target a younger audience, online and social media may be the way to go. Older audiences may still pay attention to print advertising, such as newspapers and magazines. Analyze your audience and where they’re consuming most of their media and create your media plan from there.