Online Advertising Will Continue Growing despite Weakening Economy

On August 2008, eMarketer has released the latest projection about Online Advertising. The interesting point is that advertiser will spend more money on online advertising. eMarketer saw online advertising growing from $24.5 billion in 2008 to $28.5 billion in 2009. eMarketer benchmarks its online ad spending projections against quarterly reports by the Interactive Advertising Bureau (IAB), which uses PricewaterhouseCoopers (PwC) to conduct its surveys. For the first half of 2008, the IAB reported 15.2% growth for online ad spending, which is in line with eMarketer’s predictions.

As lately reported, many companies consider to increasing the online advertising, one of them is General Motor. General Motors is leading the auto industry in shifting their traditional advertising campaigns to online marketing. The third-largest advertiser will spend half of their $3 billion advertising budget online. They give it 3 years to get there. Last year GM spent $197 million online.

The survey of McKinsey & Co on June, showed, 91% of 340 senior marketing executives worldwide are using online advertising, and over one-half indicate that their companies plan to maintain or exceed current levels where possible. Even more telling, 55% of marketers said they’re cutting expenditures on traditional media, precisely in order to increase funding for online efforts.

The prediction above even more reinforced by the latest news about the internet search giant Google. Channelnewasia.com reported at 17 October 2008, “Google earnings up despite weakening economy”. Net profit rose 26 per cent in the third-quarter from the same period last year to 1.35 billion dollars while revenue was up 31 per cent at 5.54 billion dollars, beating the expectations of Wall Street analysts despite the weakening US economy.

“Why is online advertising more profitable than traditional media? According to eMarketer, There are the seven reasons:

1. The Internet is inherently more measurable and accountable than are traditional channels.

2. The Internet allows for better, more-granular targeting than do other forms of media. That reduces media waste and can save marketing dollars.

3. The Internet is interactive, thereby allowing for a higher degree of engagement with consumer and business prospects and customers.

4. Particularly among younger consumers, the Internet is accounting for a larger and larger share of total media time; numerous studies demonstrate that teens, millennials and other younger cohorts are spending more time online per week than they are watching television.

5. The Internet plays into the consumer-in-control movement and therefore provides new opportunities for marketers to be a part of their conversations about interests, attitudes, shopping plans and even brands.

6. New Web 2.0 phenomena such as blogs, social networks and Twitter provide marketers with the potential to gain rich insights into consumer behavior and attitudes (the Internet is like a perpetual focus group on steroids).

7. The Internet, unlike any other medium or channel, allows marketers to reach prospects throughout the entire consumer buying cycle, from initial awareness through pre-information-gathering to sales and post-sale feedback and support.