Internet Ad Revenue > Broadcast TV Ad Revenue

Internet Money Making Machine

For the first time ever in the history of the Interwebz, folks spent more money on Internet advertising than they did on advertising on broadcast TV. Given TV’s decades-long run as the King of Advertising Revenue, this was kind of a big deal.

According to Anthony Ha’s April TechCrunch post, which summarizes the PricewaterhouseCoopers report (PDF file), U.S. Internet ad revenue came in at roughly $42 billion last year. Broadcast TV lagged behind at roughly $40 billion. We’re talking a mere $2 billion lead for the Internet, but a win is a win.

Broadcast TV Slows Down, But Ain’t Out Yet

It’s clear that the Internet doesn’t have TV entirely beat.

As Ha writes, “The reason that they keep saying ‘broadcast TV,’ of course, is because online ads still fall well below total TV ad spending.”

Total TV ad spending, in this context, means both broadcast TV and cable TV. But given that cable TV is younger than broadcast TV—and broadcast TV was, historically, the King of Ad Revenue—the fact that Internet ad revenue still falls well below total TV ad spending isn’t that big a deal.

The big deal is that broadcast TV has fallen behind (if only by $2 billion in 2013), which is as pure a signal as you can get that the Golden Age of TV is behind us. Cable TV remains a powerhouse ($34.4 billion), as is broadcast TV ($40.1 billion), but the Internet is no slouch at $42.8 billion.

The way the PwC report breaks it down in the graph below, you see the Internet at the top, but that’s only because broadcast TV and cable TV are broken up separately. But, still, the Internet’s at the top of the list.

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Choice Quote (Referencing Mobile)

The news that interactive has outperformed broadcast television should come as no surprise. It speaks to the power that digital screens have in reaching and engaging audiences. In that same vein, the triple-digit growth of mobile is clearly a direct response to how smaller digital screens play an integral role in consumers’ lives throughout the day, as well as their critical importance to cross-screen experiences.

– Interactive Advertising Bureau President Randall Rothenberg

In other words, Internet ad spending may have outdone broadcast TV by a $2 billion margin—which is significant of itself—but the “cross-screen” experience will continue to ensure that TV ad spending remains relevant, even in the face of mobile’s growth.

About the Author

Jeff Sauer is an independent Digital Marketing Consultant, Speaker and Teacher based out of a suitcase somewhere in the world. Formerly of Minneapolis, MN and San Francisco, CA.