NY Times tunes out the BBC
The Browser was rather surprised to see a story in today's New York Times about the remarkable growth of Internet advertising in Britain. We were surprised both at the story's premise - that the future of Internet advertising is in Britain - and surprised that the normally reliable Eric Pfanner would lend his name to this questionable thesis.

First, give the premise its due: Online advertising is apparently growing 40 percent a year in Britain, and will account for 14% of its total advertising this year. According to The Times, that's "the highest level in the world, and more than double the percentage in the United States."

But to conclude then that Britain has set the benchmark for all countries to emulate is a major stretch. Over in Merry Olde, some observers are scratching their heads. The number alone "doesn't mean Britain has done anything particularly interesting," says MediaGuardian blogger Jack Schofeld. He points out that, because the country is so geographically small ("slightly smaller than Oregon"), almost all of its advertising is national. In larger countries like the U.S., local advertising is much bigger - and no one has really cracked the local nut online.

But the article has a much bigger conceptual hole. If you're an advertiser in the U.S. and you want to reach a lot of people, you put your ads on commercial TV and radio - to the tune of more than $16 billion a quarter. In the U.K., however, you run into a little broadcast hurdle they call the BBC! Yes, there is commercial television and radio in the U.K., but by far the biggest audiences in the U.K. are on BBC's commercial-free airwaves. And so any advertiser seeking to maximize eyeballs is obviously going to choose a medium, such as the Internet, that is growing in reach and relatively inexpensive.

UPDATE: Here is Pfanner's response: The BBC has only about one-third of the overall television audience, and its share has been falling as the digital alternatives proliferate, expanding the potential TV advertising pool. One-third is a big share, of course, but Britain has also been a very vibrant television advertising market until quite recently, and ITV's flagship channel, for instance, has always rivaled BBC1 in terms of ratings. But recently ITV's ad revenue went into reverse just as online advertising took off. And over all, the British TV advertising market, which had been expanding rapidly, has flattened out.

The real story the Times should be pursuing is whether the BBC can continue to dominate both the airwaves and U.K. Web traffic and still maintain its monopoly on the TV licensing fee.
Posted by Jim Ledbetter 3:10 PM 0 Comments comment | Add a Comment

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.