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Economy Down, Online Advertising Up
Is there any good news associated with the recession? There is for online advertising. According to eMarketer.com, “marketers are spending more on Internet ads, while spending less on advertising in other media…”
eMarketer projects that U.S. online advertising as a percentage of total media advertising spending will grow from about 10 percent in 2009 to about 15 percent by 2013. eMarketer points out that the upward trend has been occurring before the recession, but it could very well intensify in an economic downturn.
The IAB says U.S. online advertising revenues for 2008 were $23.4 billion, up 10.6 percent over 2007. Search was the leading category, increasing almost 20 percent over 2007. At the same time, advertising from all sources last year was down 2.6 percent compared to 2007.
As advertisers and ad agencies alike can tell you, digital media has been robust for years. There are three main reasons why:
- Online advertising is immediately, easily measurable – unlike television, radio, or print.
- Online advertising can be adjusted on the fly. Entire campaigns can be changed almost instantly so results can be optimized. This dramatically increases advertising efficiency.
- Online ads complete the prospect inquiry/customer buy cycle in one seamless transaction. Whether it’s email, search, ad clickthroughs, or websites, an inquirer can receive the information necessary to make a buying decision, and just as quickly make a purchase online. This instant information-on-demand paradigm still can’t be matched by traditional media. Mobile marketing pushes the paradigm even further.
What’s also happened recently is the increase in audience and geographic targeting capabilities of the online world. The medium has grown, and so has the sophistication of media offerings.
The impending great advance in online advertising is likely to be the widespread availability of powerful personalization tools, similar to the recommendation model pioneered by online sellers like Amazon. Also coming into play are “behavioral exchanges” which sell information about website visitors. More about these developments next time.
Yes,It is really true.The internet advertising become relevant during this recession time.
Online advertising is receiving a lot of bad press lately about its effectiveness.
It is not advertising that is suffering, since only the major players are exposed, the perception is that there is a decline. Coincidentally there is an economic recession which paints the doom and gloom for all industries. Online Advertising is on a major growth curve.
The appearance of an advertising budget decline, is actually the expansion of advertising space. The number of places businesses can advertise now is growing daily. This causes the advertising to be spread thin giving the appearance of the decline.
There are many new ad networks now experiencing rapid growth compared to the rate of growth of the existing well known networks. This is a normal occurrence during a major growth trend in any industry. Take the auto industry for example during the 1940s and 1950s. They had more brands of auto makers than we can even remember. The same growth is occurring with online advertising.
This is a terrific post. It really highlights so many things that we at Hydra are seeing.
Your “three main reasons” part is spot on. We are seeing an increase in the use of Cost Per Action programs as a way to be truly measurable since advertisers only pay for the action they desire. So as you say the trend is away from the “big” media outlets toward measurable, actionable, online advertising.
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