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Traditional Media’s Historical Dominance Threatened By Technology’s Virtual Ads

A new ad spending study by Outsell Inc., an information industry research firm in Burlingame (CA), recently surveyed 1,200 advertisers with a combined advertising budget of $2.4 billion regarding their 2006 spending appetite.

Their findings showed:

·      While print and broadcast companies will take in more ad revenue, they will lose share to the Googles and Yahoos.

·      Online advertising spending is projected to surge 19%, and search engine ad spending 26%.

·      Spending on print ads is projected to grow an estimated 2%, and spending on radio and TV ads 2.4%.

Outsell estimated the Internet is now used by 80% of advertisers, a broader adoption rate than is generally acknowledged, and projected a 90% adoption rate by 2008. (Some of this online advertising, of course, is flowing to traditional media companies. . .often through deals with search engines that place ads on their web sites.)

The bottom line is that advertisers have little interest in what type media they use, as long as it works. Therefore the real challenge for the media industry is to continue to find new business models.


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