As broadband grows, so does the audience, so where’s the money?

Broadband makes a big difference in how people use the internet. In other words, they use it more.

Video didn’t really start to take off until broadband started getting serious in-home penetration.

To me, the net doesn’t even feel like the same environment as it did in pre-broadband days.

Clearly, advertising still lags way behind audience habits.

When you do the math, broadband users spend 48% of their spare time online in a typical weekday. “Currently, the proportion of advertising resources devoted to the Internet (about seven percent according to ZenithOptimedia) is nominal relative to the value it generates,” says Josh Crandall, managing director of Media-Screen.

We should expect advertising revenue for all media to increase, both in actual dollars and the amount spent per ad. Online advertising is going to get more expensive.

That’s good news for newspaper web sites.

But there are still a ton of disruptive threats out there, so it’s not all good news.  Lot’s of startups will come a long that will erode oppertunity, especially for media companies that are not already aggressive online.
Meanwhile, online TV news is gaining on us.

Why is that a concern? Because in some markets (all?), there will be a limited revenue pie for the near- to mid-term in local online advertising. It remains to be seen how well users will traverse across multiple local news site sources. Newspaper sites should be striving to be the local dominate news source online.

We should assume we are still early in the digital revolution and online audiences will continue to grow, and consumption habits will change, especially as broadband rolls into more homes and the infrastructure improves (and it will). In five years, broadband technology could be very different. More so for mobile.

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