Be a Smart Marketer

Time Shift Means $$$ Shift – Internet Advertising Grows

There are several newly published announcements that grouped together indicate both cause and effect of more time spent online, with implications for all marketers.

By 2012, nearly 25% of all TV content watched will be time-shifted, on-demand, on the Web or on a mobile device. 1
For Hispanics online, today, the Internet is already the #1 medium by time spent. Hispanics Internet users are heavy consumers of the Internet and television – 56% and 50% respectively spend at least one hour per day (seven or more hours per week) consuming these top two media.

Chart 1:

Audience figures are substantial. There are 20,011,000 unique US Hispanic visitors during the month of May 2008 online, growing 21% between May 2007 and May 2008. 2 As 30% of the Hispanic online audience surf the Internet 13+ per week according to the recently released Terra.com Hispanic Syndicated Survey, this makes the Internet truly THE lean forward interactive medium.

eMarketer estimates that TV advertising will have a compound annual growth rate (CAGR) between 2007 – 2012 of only 2.1%, while online advertising CAGR is expected to be 19.2% over the same period, meaning that Internet ad spending is growing in this sense 9x as fast as TV ad spending. Along the same vein, online advertising will overtake TV advertising spending in the US within 10 years. 3
Already, today, the Internet delivers more advertising than TV in the USA: 1.4x monthly GRP’s and 2.2x monthly impressions per person! 4

Chart 2:

Multitasking (TV/Internet) Presents Opportunities for Marketers

It is interesting, however, to note that the average number of hours spent per week among the Hispanic Internet audience is close between TV and Internet.

Chart 3:

Chart #3 indicates that the Internet is the #1 medium across first, second and third generations among US Hispanic Internet users by time spent. Also, the Internet ranks ahead of television for Hispanics 34 years old and younger, while those 35+ years of age spend slightly more time watching TV than surfing the Internet.

Of Hispanic Internet users who watch TV, almost half, or 48%, use a DVR, VOD or both. Digital Video Recorders (DVR) and Video on Demand (VOD) present challenges to traditional television advertising, as the advertising itself is either skipped or simply not viewed at all, respectively. These numbers are either on par or ahead of US General Market, where 26.8% of TV households partake in DVR, and 38.5% consume VOD in 2008. 5

Chart 4:

According to Chart #4, the majority (88%) of DVR owners always/frequently skip TV commercials during Nov 07, begging the question just who is actually watching traditional TV advertising?

Before those gainfully employed in traditional television advertising leave in droves to our dot com world, one area that deserves more attention by marketers is the multitasking space (TV/Internet).

About seven-in-ten Hispanics online have a television and computer in the same room, and 93% of these report that they multi-task between the two always, often, or occasionally (this represents about two-thirds of all respondents). Of which, only 7% indicate that they pay more attention to the TV while the rest claim Internet/TV equally or pay more attention to the Internet. 6

Chart 5:

Computer Activities Done During Multi-tasking by Age

Base: Those who use a computer and watch TV at the same time 7

When asked the question, “Which computer activities do you typically take part in while also watching TV? Please select all that apply.”, it is evident that the Internet can serve as the extension of the experience provided by TV. More than 1 in 5, or 22% of Hispanic Internet users purchase product(s) online that were featured on TV show or ad, while viral (send email) and research components related to the TV show being watched are evident as well.

Be a Smart Marketer. In summary, recognize that the Internet outpaces TV ad spending by a factor of 9.2x, and already delivers more advertising than TV. There exist a variety of reasons why this is occurring, such as: high DVR/VOD adoption, the ability of the Internet medium to offer more refined targeting and measurability in comparison to other media, or simply just the coolness factor of being connected in the World Wide Web.

The Hispanic Internet audience has catapulted the Internet as their #1 media in terms of time spent, and being that Hispanics are the #1 minority both online and offline in the USA makes a strong case to reach the Hispanic market – online.

Do not wait 10 years during which time Internet ad spending is forecasted to surpass TV ad spending. Allocate digital budget now, accordingly.

Terra Networks USA would like to congratulate the US Hispanic Internet audience for making the Internet their #1 medium by time spent, in comparison to watching TV, listening to the radio (not online radio), or reading newspapers and magazines. Thank you!

1.) eMarketer. TV Trends: Consumers Demand Control. June 2008. page 1

2.) comScore Media Metrix. % Change Media Trend Report. US Hispanic Service. May 2007, May 2008. Unique Visitor metric. Analysis performed by Terra Networks USA.

3.) eMarketer. TV Trends: Consumers Demand Control. June 2008. page 1

4.) comScore, Inc. Display Impressions: comScore Ad Metrix Jan 08. Television GRP’s: comScore Estimates. Includes Chart #2

5.) eMarketer. US Video-on-Demand (VOD)-Enabled Households and Penetration, 2007 – 2012 (millions and % of TV households). US DVR Households and Penetration, 2007 – 2012 (millions and % of TV households).

6.) Terra.com Hispanic Syndicated Survey by comScore for Terra, 2008.

7.) Terra.com Hispanic Syndicated Survey by comScore for Terra, 2008.

Published by Natasha Funk. July, 2008.