Borrell: newspapers lose, television gains online

New data from Borrell Associates show an evolving picture in the shares of local online ad dollars, and none of it is really “good” from a traditional media company perspective.

Over a three year period, newspapers have lost 17.2% of market share on average. Television has picked up share (7.6%) since 2004, and that’s due to a more focused effort by stations and the rise of online video, among other factors. But the big gainer is internet pureplay companies (34.4% market share gain), including the biggies, like Google, Yahoo, AOL and MSN.

Remember, this is LOCAL online ad revenues. The category, however, also includes a growing number of niche verticals and other local online sites, many of which are no doubt run by media companies — sans the brand.

graphs showing online ad share changes

Borrell Associates president Colby Atwood told me that these are interesting times, to be sure.

The acceleration in local online ad spending is giving newspaper sites some serious whiplash. Those sites are growing far faster than their print parents, but not fast enough to keep up with the market. New online advertisers are swarming out of the woodwork while newspapers continue to lean heavily on their print customers for online revenues. TV and radio sites shouldn’t get too smug, though. They are gaining share right now, but if they don’t get beyond selling Web packages to their on-air advertisers, they will roll into the same patch of deep sand that is holding the newspapers back.

Colby’s exactly right. Growing online revenues may be putting smiles on some faces, but the truth is the market is growing faster. When you combine radio, television and newspapers, the problem comes into focus (down 11%). It’s not television versus newspapers; it’s traditional media against new.

So media companies will continue to fight for a decreasing share of the local web advertising pie, while pureplays will continue to grow. This is just one of the reasons why we see opportunity increasingly as outside the media brand’s reach/frequency strategy.

(Originally posted in AR&D’s Media 2.0 Intel Newsletter)

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