The Wall Street Journal ran a story Monday about Johnson & Johnson opting to sit out this time of year when the TV networks announce their program schedules for next fall and sell ad time for next year. A chart showed J&J's spending for Internet advertising at about $24 million dollars, greater than the amount spent on local and network radio combined, more than outdoor, and almost twice that for newspapers
The Internet was J&J's 6th biggest ad expenditure.
I called Jack Myers, a 25-year-veteran media business analyst, to ask whether the Internet was about to kill the video star.
He said no. Not yet.
Listen to my conversation with Jack Myers, recorded Tuesday morning.
He said the recent flurry of Web site expansions and broadband programming were intended to help TV networks stay competitive in the current "upfront" ad selling time for the major networks. In fact, the Internet efforts are one reason Myers estimates the value of business written will be close to $8.5 billion, down only a 2% from last year, despite audience losses greater than that by the major networks other than ABC-TV.
Myers estimates that $150-$200 million will be spent for broadband advertising this year. That's really a drop in the bucket. "The value is probably 2 to 3 times that, which means it's being packaged into the negotiations between advertisers and the networks." The growth that broadband advertising is experiencing, the New York-based consultant added, is coming from newspapers, direct response and promotional budgets.
While the traditional wisdom is that no new medium has ever killed an existing medium, he senses that may not be true in 15 years. He cited the popularity and growth of Internet radio stations and the wide availability of music online. "When we have Wi-Fi clouds in cities and we can walk around with an iPod or similar device and tap online, it's hard not to believe that radio and traditional medium are going to be dramatically impacted."
Myers is uncertain about the future of the media business landscape. Within 12 months, television networks and media agencies will have more information about the impact of digital video recorders and their effect on advertising viewer ship. There will also be new ratings information available about the Hispanic marketplace, he said. This may be the last year traditional broadcast and cable networks can be confident they can maintain spending from new and current advertisers, Myers believes.
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