How much ad revenue is digital really stealing from traditional media?

With marketer demand for digital media exploding, a new Standard Media Index (SMI) analysis has been able to pinpoint with a high level of accuracy just how much the shift to new media has cost the traditional channels.

To conduct this analysis, SMI looked closely at the flow of advertising dollars across the media landscape through the first nine months of the broadcast season (October ‘14 – June ‘15), compared to the same time period last year.

Given SMI’s 80% footprint of total national U.S. agency spend, these new full-market figures are the most accurate estimates of the true impact that digital media is having on the evolving ad sector, thanks to SMI’s ability to capture actual booking data from major agencies.

For this analysis, SMI used its actual ad spend data and extrapolated it to full-market in order to provide a new level of marketplace insight.

The following chart shows the drivers of digital advertising growth over the first nine months of the 2014-15 broadcast year, and the key takeaway is that digital’s growth has come from a combination of dollars being pulled from all other media types, as well as significant organic (new) growth.

NOTE: All YoY figures include the impact of the 2014 Winter Olympics and FIFA World Cup ad spend. Here are the specific data points represented in the above chart, along with more color into how the National television spending contraction is broken down:

• Digital ad spendUp $3 billion YoY (+16%)
• National TVDown $1.1 billion (-4%)
• BroadcastDown $960 million (-8%)
• CableDown $140 million (-1%)
• UpfrontDown $1.7 billion (-8%)
• ScatterUp $600 million (+12%)
• Other media
• Other TV (Local/Synd)Down $400 million (-6%)
• PrintDown $350 million (-6%)
• RadioDown $150 million (-4%)
• Organic Digital Growth: $1 billion YoY

Key Takeaways:

• The overall market is up about $1 billion dollars YoY (+1%), with this money representing digital’s organic growth.
• The results show that digital is siphoning share away from other media, with the bulk of it coming from television.
• On the national TV front, the scatter market has clawed back about 35% of the ad revenue lost in the soft 14-15 upfront, however the remainder of those dollars have flowed into digital.

SMI captures 80% of total national U.S. agency spend exclusively from the booking systems of five of the six global media holding groups, as well as leading independents. It reports monthly on actual spend data and is the clearest picture of the flow of dollars across the sector.