WILLIAMSBURG, VA. – At the rate we’ve seen digital advertising grow in 2014, and the rate Borrell Associates is forecasting for 2015, it may just be that the proverbial train has either left the station or is moving too fast for anybody else to hop aboard. Digital advertising at the local level will grow by 42 percent this year. At that rate it would account for $2 out of every $5 spent by local advertisers. It’s grown to the level of dominance that newspapers enjoyed for years, until the late 1990’s.
Four types
of companies are forming: Traditional media companies stuck in the analog
world, selling a little digital stuff because it’s easy, but not really
believing there’s good money in it; traditional media companies that are more excited
about the prospects but still reticent (or unable) to invest more in order to
grow quickly; and traditional media companies that have seen the light and are
determined to grow again, investing heavily in digital by hiring people or acquiring
companies.
That
actually makes three types of companies. The fourth is the most interesting of
all. They are the Internet “pureplays,” and there are thousands of them. True
to predictions, they have gobbled up share at the local level. In 2015, these independent
companies will account for nearly three-fourths of all digital advertising,
elbowing out local-media competitors who have tried for two decades to use
their existing sales forces to also sell digital advertising.
This report
is Borrell’s digital advertising outlook for 2015. It examines the companies
that are apparently doing the best at morphing, and looks at where all the
growth is. Several companies are making hundreds of millions of digital revenue
but have essentially stopped growing. Others are morphing from traditional
media companies into digital-media companies, now getting the majority of their
ad revenues from online advertising. It’s an interesting landscape, and this is
how it looks to us at the onset of 2015.
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