Rebranding is one thing, but reorganizing sales staffs, learning new technologies, updating training practices and basically changing a company from the inside out is a tremendous task. That is precisely the challenge being faced by legacy media organizations whose bottom lines have taken a hit as a result of digital media and device proliferation.
However, according to a new study from Borrell Associates, these legacy companies are making some headway in capturing more online ad revenues and will account for about a quarter ($12 billion) of online ad spend in 2015. Specifically, the yellow pages industry is outpacing other legacy media industries (newspapers, radio, TV) in growing digital revenues, with about 19.2% of revenues coming from online ads.
With the other 75% of online ad spending being spread unevenly across thousands of companies, the competition for online ad spend is intense. One of the saving graces for legacy media is the advertiser relationships they have built over years of working together. Couple that with today’s opportunity to help these advertisers diversify ad spend and legacy media is in a good position to grow.
The study showed that YP and Yellow Media (Canada) are attributing about 50% of revenues to online advertising. While this can be seen as strong digital progress, it may be more of a reflection on just how quickly core business has declined. Either way, digital media is changing the way legacy media does business.
Another recent study showed that overall US ad spend will grow 3.2% in 2015. While continued decline in print is expected, the news is optimistic for the rest of the media world, but the biggest driver of this growth is online ad spend which is expected to grow 13% in 2015. No surprises there, just yet another reason to start selling digital ads.
Borrell’s study doesn’t take into account non-advertising marketing services like SEO, reputation management, listings management, web design, etc. These marketing services make up an over $500 billion industry which is where the real opportunity is for legacy media to continue to grow and evolve.
But going back to online advertising, the study from Borrell breaks down the digital advertising spend by ad type. As the chart below shows, targeted display ads are expected to almost double this year and video and paid search will remain a strong part of the advertising mix.
These ad formats can be powerful, but at least in regards to the SMB, they probably aren’t a priority right now. Surprisingly enough, the SMB is still struggling to get a website they like and online ad spend probably isn’t something they are ready to invest in. The best strategy for the SMB is probably a “first things first” approach. Get online, get found and then let’s talk online ads.
We seem to be at a turning point where digital is no longer a question for advertisers and the migration to this “new” world is becoming more like a stampede. While attribution metrics are still a work in progress, advertisers are asking for digital ads. If legacy media organizations aren’t ready to take advertiser money for this, someone else will.