Consumers are moving away from ad-funded media

Rating: search is the key for mobile

By Annie Turner

US consumers are moving away from ad-funded media, according to Veronis Suhler Stevenson, if current trends continue, Internet advertising will eclipse newspapers as the largest advertising medium by 2011.

Overall, communications spending increased 6.8% in 2006 to a record USD885.2 billion, outpacing GDP growth for the fourth time in five years, the report says. VSS projects that the communications industry will grow 6.4% this year and will continue to do so at a compound annual growth rate of 6.7% to 2011. This would make communications the third fastest growing sector of the US economy.

Interestingly, consumers are spending less time (-6.3% from 2001 to 2006) with ad-supported media and more time with consumer-supported platforms like cable TV and videogames (+19.8% from 2001 through 2006). And for the first time since 1997, consumers spent less time (-0.5%) with media overall in 2006 than the year before.

VSS attributes the drop in consumer media usage to the fact that online news and entertainment typically are engaging consumers for shorter periods of time than traditional media like broadcast or cable TV. “For example, consumers typically watch broadcast or cable television at least 30 minutes per session while they spend as little as five to seven minutes viewing consumer-generated video clips online,” VSS explained.

The fastest-growing media segments in the next five years will be Internet and mobile services, branded entertainment, out-of-home media, outsourced custom publishing and public relations.

The caveat on the mobile front is just so long as the advertisers don’t blow it by putting people off with spam and other interruptions because the message from consumers in other sectors is loud and clear – they are moving away from ad-funded media just as the industry is working to transform mobile into another advertising channel. In a word, we think the key is search. Now all we need is for operators to stop larking around with Internet search engines and use the white label guys who get it.

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