What If Traditional Ad Spend Doesn’t Flip Online?

In my opinion piece In Defense Of Free earlier this week I made a sidepoint about the impact of free on the advertising and publishing sectors. Here is the point I was making:

Commentators have been arguing for a few years now that we will see a shift of marketing budgets from offline to online, that the massive spending on TV and billboards will be transplanted into the digital medium where messages can be micro-targeted in a hyper-dynamic, real-time manner. I agree that digital media will drive a dramatic drop in offline spending but I don’t know if I agree that the money will flip online.

Through the internet you can do so much ‘marketing’ for so little and even more for free. Why would a client need to shift budgets from offline to on? Why not keep the cash for something more interesting instead?

This has serious implications. As the number of free ways to market a product and service increases, we could speculate that the amount of advertising spent online today is at its all time peak and even that will gradually decline.

So… if the value of ad traditional dollars spent plummets and online dwindles that could only mean that the advertising industry will therefore suffer a rather large shrinkage. Because of free, brands won’t need as much of the services provided from ad agencies and their production companies. Will we consider advertising as a peculiarity to help businesses shout in many widespread places at the same time until the internet came along and helped businesses talk to many people as individuals at the same time?

And just to take this a little further… if brands won’t be spending as much on advertising because of free – what is going to happen to the publishing industry that relies on it? Most of the traditional newspapers and magazines that have responded to declining ad revenues offline by moving their publishing focus online aren’t going to see the uplift of online ad revenue they need to support the current size of their businesses. I know it’s not nice news to hear but I argue again that the ad spend flip from offline to online is not going to happen. Both the ad and publishing industries are going to have to quickly evolve their business models to find new ways to make revenue.

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