For years, media companies have asked whether Net use eats into consumers’ traditional media consumption. Looking at consumer data over time, Forrester gives a clear answer: For TV at least, there is very little, if any, cannibalization taking place, according to a new Technographics® brief by Forrester Research (Nasdaq: FORR).
“Since consumers started regularly using the Net, marketing and media executives have wondered whether the Web is replacing the consumption of other media or whether its use is incremental,” said Fraser Pearce, research director at Forrester’s UK Research Centre, London. “Naturally, the answer to this has far-reaching ramifications for the future of advertising — if online consumers read fewer magazines and watch less TV, media companies should move their advertising budgets appropriately.”
Forrester’s Technographics consumer profiling shows that it’s true, today’s online consumers do watch less TV than their offline counterparts — 8 percent less. But further evidence suggests that it would be wrong to conclude that being online causes a reduction in consumer’s TV viewing time. The Net’s early adopters are simply less keen on TV than their offline counterparts. And as the Net becomes increasingly mainstream, Europe’s new online consumers are bringing their offline TV consumption habits with them.
That there’s no cannibalization of TV viewing resulting from Net use is good news for ailing media companies relying on advertising revenues, but bad news for marketers trying to get the most out of their budgets. Advertisers can argue against reducing CPMs due to cannibalization, but marketers will have to prove effectiveness or increase budgets.
“With advertising rates under significant pressure, broadcasters need all the help they can get when arguing for sustained income,” Pearce added. “The absence of measurable cannibalization is good news — marketers can’t argue down TV ad rates by saying that other media are becoming more important. At the very least, media buyers can’t use the cannibalization argument to put pressure on TV ad rates. But when it comes to balancing TV ad budgets and online ad budgets, the conclusion for marketers is unfortunate — consumers use both, so moving money from one channel to the other isn’t the solution. As a result, comparable effectiveness metrics for online and offline advertising become more and more important. A dollar less spent on TV for the sake of online advertising may be a misguided decision.”