How much do we spend in the US on advertising? Well in 2007 we spent 283 billion dollars. Yes 283 billion.
That may sound like a lot but this level of growth 0.7% versus 2006 puts advertising’s share of the 2007 GDP (2%) at it’s lowest level since the recession year of 1982.
Even with an uncertain market advertising spend is projecting a 3% growth in 2008 fueled by the Summer Olympics and the Presidential Elections. Being interested in online spending I am very interested in the 2008 projections.
Below is breakdown of the 2008 projections. The data was based on a December 2007 report from Universal McCann’s Robert J. Coen as presented in the December 31st issue of Advertising Age.
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Direct Mail – $63B
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Broadcast TV – $48B
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Newspaper – $42B
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Cable TV Networks – $21B
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Radio – $18B
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Yellow Pages – $14B
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Consumer Magazine – $14B
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Internet – $12B
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All Other – $58B
What may be surprising is the fact that online spending ranks 8th. Being in the industry our natural assumption is that online spending is in the top 3. With that said though this segment over the past few years has had double digit growth and is projected at a 16.5% increase from 2007. The next closest in terms of growth will be spend on Cable TV at a 6% increase.
The flip side is the reduction in spend on traditional mediums such as newspaper which is actually seeing a decrease of -1.8% of spend as compared to 2007 and Radio which is only seeing a 0.2% increase.
With the recent trends in online spending continuing to increase. The success of Google’s AdWords system and now with Microsoft commiting to a marketing focus now is the time to focus attention on the medium.
This translates to very good news for online solutions and providers as well. Especially around social media based solutions. The need for social interaction with customers and users has now fully proliferated traditional business and the marketing dollars are now being fully allocated to deploying collaborative solutions as part of their integrated marketing strategy. I see this trend continuing into the near future.