Google will make more advertising revenue in the United Kingdom this year than Channel 4, the publicly-owned broadcaster’s chief executive said on Wednesday, as he warned the TV industry had underestimated the threat of the internet.
In an interview with Reuters, Andy Duncan said some traditional broadcasters had been slow to recognise the challenge posed by the internet and multichannel TV, which cut into the audience and ad revenues of terrestrial broadcasters.
”[This] reinforces that significant structural change has been going on and will continue to go on,” Duncan said in reference to the UK advertising market.
”Some broadcasters have been very slow to realise this. The industry as a whole is frankly rather backward looking and is perhaps underestimating the scale of change that is going on and the pace of change.”
Duncan said Channel 4, which is publicly owned but funded by advertising, had had an ”incredibly good year,” increasing its audience share by 10% and boosting its share of the ad market.
This made the comparison to the search engine all the more striking, he said.
According to Google’s 2005 annual report, the UK accounted for $1,68-billion or 14% of the search engine’s consolidated revenues.
A spokesperson for Channel 4 said annual ad revenues for the group including its digital channels were estimated at around £800-million.
ITV, the country’s biggest commercial broadcaster, had an annual advertising revenue for 2005 of around £1,7-billion, a spokesperson said.
Duncan, who has previously said he expects the TV advertising market to fall by 6% to 7% for 2007, said broadcasters needed to put an emphasis on quality programming to prevent viewers from drifting to other forms of media.
He said Channel 4 had also prepared for the impact of the internet by widening its service to provide video-on-demand, an improved website and mobile content.
The Internet Advertising Bureau (IAB UK) said last month that online advertising spending in Britain had jumped 40% in the first half of 2006 compared with a year ago, taking a market share of 10,5%.
The media planning and buying firm ZenithOptimedia said recently that smaller brands were opting for the Internet because it was relatively cheap and could target their markets effectively.
”Traditional TV [needs to recognise] that it is now operating in a multimedia landscape and no longer lives in a kind of island by itself,” Duncan said.
”I think things will improve, I’m broadly optimistic about the future but I think it’s a future that needs to recognise that there is structural change that will happen and will continue to happen.
”It’s not going to simply bounce back to how it was a few years ago. I don’t think for a minute that people will stop spending money online, the two are very much going to live side by side.” – Reuters