Television vs. Digital – Place Your Bets

(Part I) CMG Partners is a marketing strategy firm specializing in both digital and traditional media. Principal Craig Montgomery focuses on consulting, strategy and business development activities for his clients. While CMG does not partake in digital media logistics on a grand scale for its own operations, the firm helps clients with their digital media logistics.

Montgomery has recently noticed what he calls an “interesting and fluid dynamic” between online and traditional media. “As Newton once said, ‘For each action there is an equal and opposite reaction,’” he notes.

“It was not long ago that we saw massive surges in online spending. This was due, in part at least, to the expansion of online channels and the ability to measure online spending much more effectively than television spending.  Over time, the television media industry has become more attuned to this and in turn has done a better job broadening its revenue base.

“To put it another way, the television media industry is not going to just lie down and surrender easily – at least not yet,” Montgomery says. “It has outdone far too many challengers up to this point.  Television will continue to find new and interesting ways to capture media dollars in the short term. This may also lead to a blurring of the two mediums in terms of how dollars are spent and implemented. This is where the turn of power will occur.”

Montgomery notes that online media growth is partially fueled by the content from television, which spurs new online advertising platforms. This means the cost of creating that content can be spread over two mediums versus one, and shared with more people via different vehicles.

“The problem only arises if your online advertising revenue is less per viewer than television, and you are just trading viewers from one channel to the other,” he says. “That is the definition of a slow death.”

While some would argue that it is only a matter of time before online overshadows television, Montgomery says, “Internet advertising has surpassed cable television in ad revenue. Some say Nielsen data indicates that in few years it will eclipse all television ad revenue. Place your bets.”