Ad Age reports that McKinsey is singing a requiem for TV advertising:
McKinsey & Co. is telling a host of major marketers that by 2010, traditional TV advertising will be one-third as effective as it was in 1990.
That shocking statistic, delivered to the company’s Fortune 100 clients in a report on media proliferation, assumes a 15% decrease in buying power driving by cost-per-thousand rate increases; a 23% decline in ads viewed due to switching off; a 9% loss of attention to ads due to increased multitasking and a 37% decrease in message impact due to saturation. . . .
According to the report, real ad spending on prime-time broadcast TV has increased over last decade by about 40% even as viewers have dropped almost 50%. Paying more for less translates into a much higher cost-per-viewer-reached — a trend also true in radio and print.
And how stupid are the advertisers who kept paying for those increases? Well, Ad Age points out that Bob Garfield’s chaos scenario is at work: The new media aren’t ready for dollars shifting from old media. Shame on us. Ad Age continues:
Thank a combination of older technologies such as cable, PC computers, cellphones, CD players, VCRs, game consoles and the internet, along with more recent ones — PDAs, broadband Internet, digital cable, home wireless networks, MP3 players, DVRs and VOD– for those changes. And teens foretell an even more radical shift in future media consumption, the report points out: They spend less than half as much time watching TV as typical adults do. Teens also spend 600% more time online, surfing the web.
According to Forrester Research’s most recent North American Consumer Technology Adoption Study, people ages 18 to 26 spend more time online than watching TV and are adopting new technology faster than any other generation. Because of that, they tend to be more receptive to blog, podcast and mobile-web ads.
If we can give the advertisers what they want — measurement, verification, data — their money will come to us.