While the media focused on the lives of six miners in Utah, questioned whether presidential hopeful Barack Obama was black enough and speculated on Karl Rove’s future,  another huge story broke that greatly affects the future of traditional media as we know it.

Veronis, Suhler and Stevenson - VSS -, a private equity firm, released a report last week that shows that overall communications spending will exceed $1 trillion for the first time ever, and that if current trends continue, internet advertising will become the largest ad segment, outpacing newspapers. The report also showed an overall drop in consumers’ media usage as they moved to the Internet to get their news and entertainment information from websites.  The result:  Consumers can get their fill of news quicker online than reading through the morning newspaper or waiting to watch a half-hour of local, cable or network news.

Pardon the pun, but the handwriting has been on the wall for the past 10 years, and particularly the past six years. Even with the dotcom bust in 2001, advertising in traditional media has been growing at a significantly slower pace than Internet advertising.  According to VSS, between 2001 and 2006,  print-based advertising – newspapers, yellow pages and magazines, grew only 2.1% while interactive marketing and e-publishing grew 17.3%.  That’s nine times as much! 

For traditional media, the news doesn’t get any better in the next five years. To try to keep up with this ‘transition’ to the new world of the digital economy, media companies are going to have to infuse extra dosages of adrenalin, financial resources and brain power to create new strategies and products that are within what VSS predicts to be the fastest-growing media segments: pure-play Internet and mobile services, branded entertainment, out-of-home media, outsourced custom publishing and public relations.