Dave’s Take

According to the latest Arbitron/Edison Research report, a full 48% of all Americans aged 12 and older are currently members of at least one social network. This rate of social membership is a dramatic jump from their 2008 study, which revealed a social network acceptance of just 24%. The doubling of social connectivity proves once and for all that social networking has gone mainstream and will only continue to grow in the future.

Even more surprising, it’s not just the young who are socializing online. While a full 78% of all teenagers and nearly 77% of people aged 18 to 24 have at least one personal profile page, almost two thirds of those Americans aged 25 to 34 do so as well. However, the real surprising numbers are found in the 35 to 44 age group, where over half now have personal profile pages online. “The use of social networking sites has expanded beyond the younger consumers, with substantial numbers of Americans over the age of 35 now using social media,” summarizes Bill Rose, SVP of marketing at Arbitron.

Along with the increased use of social networking is the growing perception of Internet importance among all age groups. For the first time since Arbitron began polling, more US citizens believe the Internet was the “most essential” among information channels, including television, radio and newspapers. The order of importance to individual users has the Internet at 42%, followed by TV at 37%, radio with 14% and not surprisingly bringing up the rear, newspapers with just 5%. Underlining these newly arranged priorities, the study revealed that now six out of ten households currently have Wi-Fi capabilities.

In addition to the dramatic increase in social networking, the study also disclosed the growing importance mobile texting plays. A full 45% of all mobile phone owners text message on a daily basis. Broken down by age groups, they discovered that 75% of all teens text, followed by 76% of 18 to 24 year olds, 63% of 25 to 34 year olds, 42% of those aged 35 to 44 and a growing 37% of 45 to 54 year olds text daily.

If nothing else, this report disproves the old adage of not being able to teach old dogs new tricks. Regardless of age, Americans are always ready for the next adventure and with social networking, they’ve adapted quickly. I wonder if the same will hold true when the 3-D revolution hits next year.

Everyone in advertising knows firsthand how this economy is killing our biz. Excluding the big three, (real estate, construction and automotive) perhaps no other profession has been as hurt by this recession as the advertising industry. Just about every agency in the country is struggling to stay alive regardless of their cost cutting strategies. With a drop of 8.5% in total ad spending this year, things are looking bleak. Unfortunately for traditional advertising, the news just gets worse.

The latest quarterly forecast from Publicis’ ZenithOptima Group only confirms what we’ve all been witnessing—traditional ad spending is in the tank, while online outlays continue to grow. Their latest report predicts Internet ad spending will expand 10.1% in 2009, a jump of 1.5% over their April forecast. Based upon current leanings, industry projections are for a 12.6% increase in 2009 online ad budgets, totaling to more than a respectable $56.8 billion. This represents an amazing gain of over two full points of worldwide ad share, with trending only pointing to more gains.

Next year, they predict online ad expenditures to exceed 15% of ALL advertising monies spent. What’s driving this expansion? Three words — Paid Search Advertising. With consumers increasingly on the lookout for bigger and better bargains, paid search advertising is expected to grow by a shocking 20% in 2009 alone. In addition to bargain hunters, new competition from innovations like Microsoft’s Bing is only making paid search advertising more competitive…and profitable.

And just who is giving up market share to feed this online growth? Surprise – it’s traditional advertising. 2009 totals are expected to show a 7.1% drop in TV ad revenue, followed by outdoor (-7.0%) and cinema (-4.8%). While these drops in spending are bad for their prospective industries, they are positively marvelous compared to those in the print media. Newspapers are expected to suffer an incredible 14.7% decrease in ad revenues this year, topped only by the 16.7% of losses facing magazine publishers. Future trends predict a rebound for the slicks business, but only doom and gloom for the rags.

What this all means to the advertising industry is still unknown. Are these numbers sustainable or just anomalies? Will online ads really deliver the sales and brand loyalty that television and print have accomplished? Will savvy consumers embrace online ads as helpful instead of intrusive? Who knows? All I know is that in advertising, you either embrace the future or learn a new profession.