Of Share Shifts and Tipping Points

Over at SEL, I wrote about some data and analysis from Henry Blodget that shows online media gaining share at the expense of traditional media (print, TV and radio). He has a nice spreadsheet that captures the Y/Y shift:

Silicon Alley Data

Source: Silicon Alley Insider (8/07)

Consumers long ago embraced the Internet — though not to the exclusion of traditional media — and advertisers are finally catching up to these shifts in consumer behavior. To that end, I was told this morning by an informed insider at a CMR that the top national print yellow pages revenue category (insurance) was seeing “double digit” usage declines.

By contrast, my former colleague at the Kelsey Group, Charles Laughlin, posts on the recent TMP Directional Marketing data and disputes my characterization of it as a “tipping point“:

Because the survey was conducted using an online panel, calling the results evidence of a “tipping point” from print to online is going too far. McKelvey believes a survey with a representative sample would be necessary to reach that conclusion.

I stumbled across the post while doing research on something unrelated. But I need to respond to it. Online panels are, of course, not completely representative of the population and the quality of online research is extremely variable. (However online panels used to be much less representative than they are today.) The Kelsey Group also does online research, as well as telephone surveys.

Relevant to this discussion is an early 2006 Kelsey Group survey in the context of larger third party research, which showed that print yellow pages was the “first choice” for local business information. I don’t recall the methodology used; it may have been a telephone survey but may also have been involved an online panel. Segmented by age, income and education, the data were slightly different than the overall findings. If those same questions were asked today (“what’s your first choice for local business information?”), I’m sure there would be meaningful differences in the results.

Charles Laughlin, who is both smart and typically cautious, in this case both promotes and discounts the TMP findings by emphasizing the print yellow pages data that showed 33% of respondents used print as a primary resource. He discounts the Internet portion of the data by asserting (per McKelvey) that as an online panel it was not representative of the US population as a whole and a piece of “point in time” research.

As pure statements of fact, these are true. But I believe the TMP results are significant: 60% of respondents used the Internet as their primary local resource. Indeed, we’re not going to see a reversal of the consumer trend toward the Internet and digital platforms (incl. mobile). I believe we have crossed a tipping point.

Does this mean that print is dead? No, clearly not. Audiences are fragmenting. Print and other traditional media remain important and valuable consumer and advertiser vehicles; however, they’re clearly not as powerful or effective as they used to be. This is simply a fact. By the same token, consumer use of and attitudes toward the Internet are a complicated matter, as Pew segmentation/audience data recently showed.

Print yellow pages publishers themselves are now wisely saying to the marketplace that they’re “platform agnostic” and will deliver leads to local advertisers from print, Internet and mobile (as it kicks in). While traditional yellow pages and traditional media more generally aren’t going to be overthrown by the Internet, they are seeing audience erosion that is in some cases significant.

I don’t think that anyone can deny that the market is fundamentally shifting. To do so would simply be foolish.

3 Responses to “Of Share Shifts and Tipping Points”

  1. earlpearl Says:

    Great Post. That spread sheet is incredibly revealing with regard to trends in advertising expenditures. I assume aggregate spending for non web advertising would be dramatically higher with so many other sources. Still the trend information is revealing. It was also interesting to see that Yahoo had relatively poor year to year aggregate growth compared to MSN and AOL.

    All in all very interesting post and information. Thanks.

    Dave

  2. John Lowe Says:

    Very well said. As a former market research consultant I can tell you that telephone surveys aren’t as representative as most people believe either (how many of us will actually do a survey on the telephone these days unless it is something we are personally interested in?) Given the portion of the population that are online is so large and the spread in the numbers (33% vs 60%) it would impossible for any market researcher to conclude that print is still more important than internet as a primary source for local business information. Not even a political strategist could spin that one and have anyone believe him.

  3. Greg Sterling Says:

    I received some comments in email about problems with Blodget’s calculations that exaggerated the numbers and growth of online. We’ll see if Blodget corrects/restates them.

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