Traditional Media Not Dead Yet

It’s here – the tipping point. Online media usage penetration exceeded usage of traditional media for the first time last year, said John F. Kelsey III, the interactive media guru who spoke to the Princeton Chamber on Thursday.

But don’t toll the bells for traditional media just yet, because digital media is getting just six percent of the local marketing dollars, according to Kelsey’s research. “Businesses are using digital media for local advertising, but they are not paying a lot of money for it,” said Kelsey. Direct mail leads traditional media’s dollar share at 28.0 percent of spending, with newspapers at 21.5 percent, and online and interactive at 5.4 percent.

His charts are on the Princeton Regional Chamber website. They showed that traditional media is not going away, just getting a smaller share of the market. (Traditional media includes direct mail, yellow pages, and broadcasting, not just newspapers and magazines.) It dropped from $141 billion in 2008 to $115 billion in 2009.

That’s the bad news. But it won’t drop much more (only to $108 billion) by 2014. Good news? Maybe not. Kelsey says the economy “hit the reset” button last year. Unlike recessions in recent memory that bounced right back, this one won’t bounce back. Where we are now is where we are going to be for a good long while.

Kelsey has sold his company to BAI (now called BAI/Kelsey), but he has access to, and shared, some valuable statistics. By 2014 interactive media will get 25 percent of the market share, and this is an industry that will not grow.

How are small- to medium-sized businesses choosing media? Interactive media is the choice for 44 percent of new companies, and 32 percent of SMBs over all. Just 18 percent of the older companies – probably the bigger ones – are using it. “SMBs believe that interactive media has a better return on investment,” he said.

I was surprised at Kelsey’s claim that 80 percent of products and services are bought within 20 miles of your home, and that won’t change. I thought more people were buying online. I guess he counts groceries and dry cleaning.

His advice: Use the new media to communicate so you can exceed the expectations of your current clients, so they want to come back.

Kelsey comforted those who are daunted by change: “The basic tenets of the marketing mix haven’t changed, but the elements are evolving. Hire people/vendors who will move you out of your comfort zone.”

And if regional newspapers will falter, local newspapers will do just fine. “Traditional media is alive and well,” said Kelsey, “at least for now.” What about all the reports of layoffs? Other companies do layoffs quietly. “When media does layoffs, they write about it.”

Click here for the PDF file.

2 thoughts on “Traditional Media Not Dead Yet

  1. Mark of @Alchemy United, that's an astute comment. Kelsey aimed to answer it with one of his charts. He predicts that though spending on digital media will steadily rise through 2014, that spending on traditional media will remain flat. So it's not "forward momentum" that maintains traditional media. Perhaps we call it "inertia?"

  2. "But don’t toll the bells for traditional media just yet, because digital media is getting just six percent of the local marketing dollars…" Yes, this is good news for traditional media. However, since "online media usage penetration exceeded usage of traditional media" then the majority of companies spending money on using the traditional channels are in fact out of touch with the reality of the market. Traditional media is surviving on nothing but forward momentum. The question is, how long will that luck last?

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