A Sure Thing

Place your bets

Our friend Pat Younge was over for dinner last night.

He’s the President and CEO of The Travel Channel, and besides being a friend is our business partner.

Now, the thing I really like about Pat, and the reason we are both friends and partners, is that he is the kind of guy who jumps on my laptop in the middle of dinner to show us something interesting.

He had a powerpoint deck dealing with ad sales and future projections, not just for his channel, but for the media business in general.

(Dinner was fish pie and salad – very very good).

In any event, somewhere between the first and second helpings he moved across the table and called up a series of charts showing media ad spending vs. consumption of media.

It was fascinating.

TV, for example, consumes 32% of our time and represents 32% of advertising money spent on that medium. In other words, its pretty much in balance.

Newspapers, on the other hand, consume 7% of our time, yet consume (at the moment), 20% of advertising dollars. A medium out of touch with current realities, and hence out of balance.

But the Internet (to go back to our Screenworld scenario), now represents 25% of our media consumption on a daily basis, yet only garners a paltry 8% of advertising dollars at the moment. Clearly, out of balance.

Also, (and this is a real growth area), mobile phones, (which today are far more than phones), consume 13% of our time, yet only receive less than 1% of current ad spending.

Thus, between mobile phones and the Internet we are looking at two platforms that consume 38% of our attention yet currently only attract 8% of advertising spend, currently.

Clearly this is an area ripe for enormous growth, and as video moves both to online and phones, it is about to become a very profitable play, for those who can produce the video at a reasonable cost.

At least, that’s where we’re placing our bets.