Internet ad spending has overtaken TV for the first time, according to figures released by the Internet Advertising Bureau (IAB) today.

Guy Phillipson, chief executive of the IAB, said: “Internet advertising has beaten all expectations to achieve growth in the most challenging market conditions.”

TV revenues fell 16.1%, according to the figures, meaning it has lost its status as the medium with the biggest market share to the one that had the smallest share only six years ago.

Online now has a 23.5% market share compared to TV’s 21.9%.

PricewaterhouseCoopers online advertising expert Eva Berg-Winters said “Perhaps surprisingly, a slowing economy has accelerated the migration to digital technology and hence the continuing shift from more traditional forms of advertising to online, which promises return on investment and measurability in a period of instability. The only certainty is that this transgression demands fundamental structural change of business models across all industries.”

The marketing director Lindsey Clay of Thinkbox, a UK commercial TV marketing body is one of those who doesn’t want to see their business model change.

The original articles here:

Internet outstrips TV but total ad spend plummets 17%

Online advertising spend ’surpasses TV’

From time to time I visit Reuters.com to look at the latest news events in video. How sorely was disappointed and quickly annoyed with the advertising that they’ve appended to EACH news item video. It makes it an absolute horror to watch. It is even worse than prime time television news broadcasting. At least they only hit you once every 10 minutes or so.

So greedy have they become, the same adverts that run in the video are also displayed as static image adverts along the side of the page. The adverts aren’t even contextual. So you could be watching a story about the latest horrific bombing of civilians after your happy family chocolates advert. Hardly the sort of product placement I’d want for my brand or product.

Many of the large corporations seem to be at a loss as what to do with online video. The bandwidth and storage it consumes is costly. And so they are left scratching their heads as to how they can possibly turn a profit from it.

The must be long deafening silences in corporate think tanks until some bright spark comes up with the idea of let’s do it the old way because we don’t dare try anything new. Just ram it down people’s throats. Why we’re so big, the audience doesn’t have a choice.

Or do they? The coporations seem to be longing for the silver bullet fix to this nasty new media technology, that gives the consumer, god forbid, a choice. As I wrote in my previous post about Facebook overtaking MySpace, the quickening pace of innovation is threatening the very foundations of the business models that have dominated our modern media.

New upstart startups can quickly rocket ahead of lumbering Jurassic giants leaving them scrambling in the dust to catch up. This can be seen the make overs, widgets and other functionality features that MySpace quickly sticky taped on to their website.

And now there’s a new can of worms called mobile media. With expensive data transfer rates and limited screen space on hand held mobile devices, there will be even less tolerance from audiences for advertising bully boy tactics.

A growing thorn in the sides of these media moguls is the fact that the audience is no longer a dumb mute consumer. They have a voice and are willing to share their opinions and experiences amongst their social networks. Enabled by the immediacy of networked digital technology they can quickly inform each other of where better opportunities or offers are.

Oft of late have I read the of the media complaining of this citizen journalism, complaining how they are leeches that take their hard work and regurgitate it. These same voices fail to  then acknowledge the two way street where the “professional” journalists are now trawling social media networks for the latest events as they are proving more immediate than the standard news networks, as evidenced recently with the Twitter and Gaza and plane crashes.

Think it impossible for the status quo to be challenged? Ponder this. Neither Google or Facebook have been sold into established media hands. They both rose from backyard obscurity to being two of the most powerful companies on the internet. They could challenge establishment because of their willingness to innovate. Both have been shrewd enough not to opt for the easy path and attempt to force advertising on their users.

But the question often asked in the media circles today, is how and when will they turn a profit from their huge user bases? The answer to that lies with how innovative and useful they choose to be for the people who use their services and paying close attention to how they are used and giving people what they want or need.

In a moment of synchronicity, following my post about a projected increase of internet marketing budgets I discovered an article about internet marketing costs.

Ian Lurie has some put forward a basic out line of realistic costs for internet marketing.

Strangely many businesses still have expectations that internet marketing costs next to nothing. As they say, you get what you pay for.

Sixty percent of chief marketing officers (CMOs) intend to spend more than half of their total budgets on internet marketing in the next 12 months, a new survey has found.

This is likely to result in a decline in expenditure on more traditional channels of marketing, the poll by Rackspace indicated. The survey found that out of 130 marketing bosses, 61 per cent will make the online medium their biggest outlet in 2009, despite 40 per cent saying they have had difficulties in the past due to technical problems, New Media Age reports.

However, the majority of respondents said they believed the effectiveness of social networking campaigns in an online strategy was limited, with only 35 per cent of CMOs stating that they thought the online medium offered the best results transparency.

Furthermore, the survey showed that not enough marketers are considering website performance when rolling out new campaigns – fewer than half (48%) of respondents said that they took steps to make sure their websites could cope with higher traffic levels when running an internet marketing campaign.

Last month, TNS Media Intelligence research found that US advertising spending was on the decline, with a 1.6 per cent drop during the first half of 2008.

However, online advertising was one of the few sectors that bucked the trend, with spend increasing by eight per cent. A recent eMarketer report suggested that spending on search marketing in the UK will rise to more than £2 billion by the end of this year. While in the U.S., a recent study commissioned by the American Marketing Association and carried out by the Fuqua School of Business at Duke University revealed that US business-to-business product marketers intend to increase online spending by 12.87 per cent in the next 12 months, eMarketer reports.

Dean DeBiase of TNS remarked: "It appears marketers are placing an emphasis upon enhanced efficiencies for their brands and the ability to engage with well-defined audiences to ensure ever greater return on investment."

eBay has lost its battle against the competition watchdog to institute a controversial payment policy.

eBay had planned to use Australia to trial the ban on all other forms of payment apart from cash on delivery and PayPal, an electronic service it owns.

There were few voices in support of eBay’s commercial freedom to tie use of its own payments mechanism to purchases (with the Wall Street Journal and The Sheet two of the few).

Sellers were furious about the policy because PayPal charges sellers 30¢ for each transaction plus between 1.1% and 2.4% of the payment as commission.

The ACCC received about 700 submissions, including from the Reserve Bank, Australian Bankers' Association and Google, criticising the move. On June 12, the ACCC released a draft notice revoking immunity from sections of the Trade Practices Act that would shield eBay from being sued for engaging in anti-competitive conduct.

One aspect of the company’s plan remains. eBay requires all sellers to offer PayPal as a payment choice on eBay.com.au along with other permitted payment methods of their choosing.