TV Ad revenue could dry up by 2020

According to a study commissioned by Ofcom, TV ad revenue could dry up by the year 2020. The growth of the internet is cited as a major cause.

The study found that the value of conventional TV ads could fall from £3.16bn in 2007 to just £520m in 12 years’ time – a drop of 83 per cent – if some of the most dramatic predictions about the growth of the internet become a reality. [Via - Guardian | The Observer]

This is a big deal.

If TV ads lose their value that quickly I doubt the advertising and marketing industry would be able to keep up with it. According to data compiled and analyzed by Google:

Americans spend an average of 14 hours a week online and 14 hours watching TV. But marketers spend 22% of of their advertising dollars on TV and only 6% online. [Via - Wharton Alumni Magazine]

This data coupled with the findings of Ofcom’s study could mean that we’re facing the death of the TV Ad. And it would be more of a crash given the time line the study cited.

What This Means for Game Marketing

Game companies are closely tied to their audiences via forums, blogs and game’s press websites. These companies know how the internet affects the way their brands are perceived. So the transition to alternative forms of advertising will be smooth. Industries that aren’t well tuned to online marketing may not fare so well. Their transition will be rough as they try to figure out the online space, what it means for their brands and how to stand out as more companies join the conversation.

Another Indication that We’ll See More Ads In-Game

Game companies are already spending a lot of resources on online ad buys. The money left over from television’s demise could be moved to support the development of contextual in-game ads.

What This Means for Everyone Else

Learn the ‘ins and outs’ of online marketing before its too late. The internet is already cluttered with companies telling stories about their products. Get in now and build an online presence that can be felt by your consumers before the space becomes too crowded. If you wait too long it’ll be harder to break through the noise after TV ads die.

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