Even in this era of recycled TV storylines, there’s one the Television Bureau of Canada (TVB) has grown weary of: the internet continues to steal advertising dollars from television.
In September, IAB Canada’s annual “Internet Advertising Report” claimed that internet advertising surpassed television for the first time in 2013, generating approximately $3.5 billion in revenue – a 14% increase from 2012, and about $100 million more than TV.
This apparent sea change in the industry generated numerous headlines. However, TVB president and CEO Theresa Treutler called it a “lazy man’s” interpretation of the data. “If you look under the sheet, there’s a lot more to it than that statement,” she said.
The TVB is downplaying suggestions that the internet’s rapid growth is coming at the expense of TV, noting that a change in reporting methodology, as well as the IAB’s inclusion of revenues generated by the digital operations of traditional media companies, is providing an unfair boost for digital revenue numbers.
“It’s interesting that when the internet number gets released, we get quite a few calls from agencies asking for clarity,” Treutler told Marketing. “The way the numbers have been compiled this year, it’s even more difficult to understand the truth.”
The TVB claims the IAB report creates a false impression that pure-play suppliers like Google and Facebook are generating all of the online ad revenue, suggesting that they are displacing traditional companies – all of which have a robust digital presence.
While Treutler doesn’t dispute online advertising’s 28.8% share of the total Canadian ad market (compared with 27.6% for TV), she said it’s wrong to characterize the internet’s continued growth as coming at the expense of TV.
TVB research suggested when subtracting the $122.9 million in digital ad revenue generated by TV broadcasters – as well as another $230.5 million generated by daily newspapers – the internet’s share of the total ad pie is actually about $3.14 billion, compared with $3.5 billion for TV.
If the $384 million in online ad revenue generated by TV and daily and community newspapers was attributed to both the internet and the original revenue sources, the difference between the internet and TV would be negligible – $3.525 billion versus $3.509 billion, respectively – says the TVB.
IAB Canada president Chris Williams told Marketing the organization does collect ad spend numbers from broadcasters, print brands and digital pure plays, but does not break them out by advertising segment.
“We believe that the market is looking for insights that are based on formats (video, search, etc.) to guide media and creative strategy development and that, especially in the case of video, we want to understand a holistic approach that combines offline and online,” he said.
Williams said the IAB recognizes that the digital spend number is comprised of components that could be allocated in “many different ways,” noting that it takes the digital presence of traditional media into account with its annual Canadian Media Usage Study (CMUST).
“It would be a bit messy, but anyone could allocate the digital video spend number we report added to the TVB’s spend and come up with a rough estimate that video is by far the largest format of the advertising media spend,” he said.
The TVB first began reporting revenue for online TV in 2011 (newspapers began doing so in 2006).
Treutler said the TVB has also tried – unsuccessfully – to get Canadian magazine publishers and radio broadcasters to provide breakouts for online advertising. “We’d love to also provide their online numbers,” said Treutler. “Clearly they’re there, but right now they’re included solely within the IAB numbers.”
Treutler also questioned IAB numbers that show mobile advertising growing to $146 million in 2013 from $92 million in 2012, noting that while there are breakdowns for various internet segments, all mobile activity – whether search, display, e-mail – is rolled into that one number.
Treutler said defining advertising as “the placement of commercial messages within content that is relevant to the consumer,” would also radically impact internet ad spend numbers, with the pure internet advertising component – which would be redefined as display and online video – comprising roughly $1.084 billion.
She suggested the creation of a new category called “consumer research” that would include yellow pages, catalogue and direct mail, as well as non-content related internet advertising, would have a sizeable impact on internet revenues.
“It’s absolutely a valid strategy within today’s technology-rich environment, but it’s not advertising,” said Treutler of this particular ad segment, which would also include the estimated $17.4 million Canadian infomercial business.
“We’re not going to dispute the validity of the [IAB] numbers, but the true story is ‘what is advertising and what isn’t?’” said Treutler. “There are different functions that are accessed via the internet, and… I think the industry would benefit from some additional clarity.”
