Wednesday, November 25, 2009

Why is Canadian Online Advertising Spending so out of Sync with our Media Habits?

I've been reading a lot lately about Online Advertising vs. Traditional Media spending budget splits not being "in sync" with Canadian media consumption habits.

Here are the basic Canadian stats:
  • 79% of Canadian households have internet access and almost all of those (92%) are on broadband (Comscore).
  • Canadian Internet users spend more time online than Internet users in several other nations including US, UK, Japan and Germany.
  • Media consumption has shifted recently: < 35 year olds spend as much or more time online than watching television or engaging with other media (radio, newspapers, magazines) (Ipsos Reid, 2008)

However, Canadian marketers and advertisers, have been slow to respond:

  • 11% of their Canadian advertising dollars go to online (IAB Canada 2008)

For comparison, let's look at other industrialized nations:

  • UK co's invest 20% of ad budgets online
  • US avg. is currently 12% and anticipated to grow to 21% over the next five years (PwC/IAB UK 2008, Forrester 2009)

And, although as of 2008 Internet Ad spending (1.6 billion) surpassed Radio (1.55 billion) (IAB Canada), as mentioned above, it is still at just 11% of total advertising spending.

Given the above statistics, and the fact that online advertising is among the most trackable/ROI measurable medium, I'm still puzzled as to why this is the case in Canada.

It is easy to point out the current situation, but far more difficult to explain why we tend to lag behind. If you have any ideas, please feel free to comment.

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