Study shows paid-for is preferred over ad-funded content

LONDON - Consumers are for the first time spending more time with paid content, including subscription based websites, e-books and video games, than they do with ad-supported media, such as newspapers and magazines, according to new research.

The annual Veronis Suhler Stevenson media survey found that consumer media usage has remained generally flat over the past year, but the way in which consumers are spending their time continues to evolve.

No longer are newspaper and magazine subscription purchases and network prime-time viewing the norm.

As they decline consumers are spending more time with media that they support and pay for as opposed to ad-supported media.

People spend less time with broadcast TV, radio, print media, while engaging more time online, with mobile media, and subscription cable, premium channels and video on demand.

John Suhler, partner at VSS, said: "This development is a culmination of two decades of this secular shift towards consumer-controlled media, and shows no signs of slowing."

Changing consumer behaviours have spurned the decline in print ad spend, especially in newspapers, where spending fell 13% last year, followed by the consumer magazine sector, which fell 6%.

This took place in a year in which consumer media use last year was flat from 2007, at 3,545 hours per person for the year, in the US.

This year and the last witnessed a major shift in the spending patterns in the communications industry as advertising became the smallest of the four major sectors in 2008 -- a first for advertising since VSS began tracking the industry in 1986.

While ad spend is expected to decline over the next five years, where it will hit bottom and begin to rebound, alternative marketing segments -- including branded entertainment and word-of-mouth marketing -- will grow at 12% annually from 2008-2013 and will contribute to overall marketing services spending growth of 3%.

Spending on branded entertainment soared 12% to $25bnbn in 2008 as brands pursued marketing strategies that engage and connect with target audiences who are increasingly skipping ads and migrating away from traditional media.

More brands pursued opportunities to integrate their products into television content and approached the nascent webisode and advergaming markets in an attempt to connect with young consumers.

As more brands incorporate venue-based media into their mix, overall spending on branded entertainment is expected to grow 9% during the forecast period, reaching $39bn in 2013.

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