Is the Internet the biggest advertising medium? Or just the most hyped?

Kantar Media, a division of WPP, just finished compiling the 100 leading national advertisers’ (100 LNA) measured-media spending for 2009, Guess which medium got the lion’s share.

If you said Internet advertising, you’d be wrong.

The biggest, hottest new 21st Century advertising medium is…network television, where the 100 LNA spent $23.62 billion on advertising, or 18.9% of the total ad spend, followed closely by that other hot new medium, magazines, whose $23.51 billion accounts for 18.8%.

Newspaper advertising was third, at $20.62 billion (16.5%).

The highest-ranked semitraditional medium was cable tv ($19.35 billion, 15.4%), which goes back to the 1980s. This was followed by spot tv, with $13.17 billion and 10.5%.

Internet advertising expenditures came in sixth, with $9.76 billion, or just 7.8%.

So does this mean the Internet is overhyped as an advertising medium? Not necessarily.

The Kantar figures represent total dollars, not number of advertisements, and rates for some media are substantially lower than others.

Even within traditional media, rates vary. Drive time radio rates are higher than night time. Prime time television rates are higher than daytime’s. Individual newspaper and magazine rates vary according to circulation.

Cable television as a whole has absorbed much, if not most, of network television’s audience. But you’d never guess it from the medium expenditure totals, because cable television ad rates are substantially lower than network television’s. They’re much closer to local radio’s. So selling many more commercial minutes than network television will still yield a lower dollar total.

Internet advertising has an entire different cost structure, where you don’t pay for the amount of time your message is on the medium, but for creating and attracting audience to it.

Hosting expenses are nominal.

Creative labor in developing sites and blogs and doing online public relations (e.g., placing stories about contests, offers, etc., on outside blogs) is the main Internet advertising cost. It’s not cheap, but it’s nowhere near the billion-dollar range. Ditto for creating e-mail blasts and e-newsletters to subscribers.

Creating banner ads and buying space on other sites are usually measured in thousands rather than millions of dollars.

Search engine optimization is tens of thousands, not billions. And pay-per-click campaigns are anywhere from a few cents to a few dollars per click. That can add to up tens of millions for one of the 100 LNA, but still not billions.

As a result, judging the Internet’s prevalence by total advertising expenditures can be misleading.

For a business that’s far smaller than the 100 LNA, there are two clear lessons:

First, the same low costs that lower the Internet’s standing in the annual 100 LNA expenditure totals make it one of the first advertising media a local advertiser can afford to turn to.

But you shouldn’t neglect more traditonal media.

The 100 LNA – companies that have grown and prospered through advertising and know what they’re doing invest heavily in newspaper and cable, spot and network (for a Richmond advertiser, network-affiliate) television.

Before deciding to shoot the works on Internet, it pays to consider their example.