Digital-based media will increasingly command consumer time and spending over the next four years, according to global private equity company Veronis Suhler Stevenson (VSS).
In its annual report, Communications Industry Forecast 2005-2009, VSS forecasts the average person will spend 10 hours a day with media and that annual spending per person on media will break $1,000 by 2009.
The report identifies four main causes of the major shifts in spending patterns and consumption habits: technology innovation, the emergence of new media, quickening audience fragmentation, increasing demand for customisation and tighter focus on return on investment.
James Rutherfurd, executive vice-president of VSS, said: "We are facing a unique transformation of the communications industry, the likes of which have not been seen in decades. During the past five years, when this ‘new media order‘ began to take shape, we have seen a gradual shift of time spent away from advertising-based to consumer-supported media, as well as a steady transfer of spending away from traditional to new media advertising."
New media advertising is expected to continue to attract ad spend in 2005 with growth of 20.7 percent compared with only 3.2 percent for traditional media. Going forward, VSS believes marketers will shift more dollars to new media in a bid to reach younger consumers. Spending on new media is forecast to reach $68.62 billion by 2009, compared to traditional media‘s $192.28 billion.
Spending on consumer magazine advertising is expected to increase 5.5 percent to $12.79 billion in 2005, while copy sales are projected to increase 3.1 percent to $10.65 billion. Overall, ad spending on consumer magazines is forecast to grow at an accelerated pace during 2005-2009 when compared to 1999-2004 period.
Specialty media and marketing services, partly driven by customer publishing, is on track for another strong year in 2005, with an expected 7 percent gain in marketing spending to $275.11 billion.
Total spending on business-to-business magazines, including advertising and circulation, increased for the first time in four years in 2004 - growing 2.2 percent to $10.29 billion compared with a decline of 0.9 percent last year. Growth in the sector is expected to be modest in the coming years. Falling circulation will be partly offset by growing advertising.
Business e-media matures
Electronic media is clearly becoming more than an afterthought in the b2b marketing world. The original model for e-media in the ‘90s, according to VSS, was focused on generating advertising. But as e-media has matured, the model has become more comprehensive, including content and databases that serve as directories, as well as banner ads, paid search and classifieds.
During the first half of 2005, e-media was the fastest-growing part of b2b sector - representing 7 to 10 percent of total revenues, compared with 3 to 5 percent in 2000-2003. It‘s a trend VSS predicts will continue as more companies add online services and ROI measurements continue to improve.
Spending on e-media is forecast to grow at an annual rate of 18.7 percent from 2004 to 2009, reaching $3.47 billion. Recent industry acquisitions support this trend. In August, specialist business information provider, Incisive Media (currently operating in seven markets) bought Search Engine Strategies (SES) for $43.0m (£24.3m).
In the same month, United Business Media, whose global brands include PR Newswire, and CMP, acquired three online and events businesses for $56.5m. Another partnership in September saw Reed Business Information‘s form a relationship with eBay, to provide business users with provisional access to online construction information and data.
