Six Pixels of Separation - The Blog
March 22, 2009 7:05 AM

When The Advertising Slowdown Picks Up

As things continue to worsen in the advertising marketplace, there does seem to be one glimmer of hope. Can you guess which advertising vertical is going to grow this year?

Before we hop into the good news, the hardest hit will be magazines, terrestrial radio, newspapers and print yellow pages. All of those areas will experience a 9% decrease (at least) according to a Myers Publishing report in the eMarketer news item, Ad Cutbacks: A Silver Lining?

And here's the "no surprise" other side of the coin:

"The good news is that Myers sees the online sector, 12% of the advertising market, growing 2.7% in 2009. Most of the growth will come from search (8%) and display (1%), but a collection of newer online ad vehicles, including online video and social networks, should see a rapid increase (25%)."

On top this, some of the other research firms are publishing differing numbers (according to the same news item):

"Oppenheimer and Co., JupiterResearch and Borrell Associates estimated higher online advertising growth than Myers, at 21%, 14.8% and 7.2%, respectively. UBS, at -5%, Cowen and Co., at -1%, and Credit Suisse, at 0.1%, all had lower estimates."

There are two obvious meta reasons for this increase (or, if you follow the more dismal numbers, the flattening): 

1. Experimentation. Advertisers who have not yet to take the online advertising plunge are going to have to try something different and new to shake up what they have done in the past.

2. Optimization. Advertisers who have been deeply engaged in online advertising are going to shift some of their traditional advertising dollars to this channel to gain efficiencies, target people who are already looking for their products and services, and get smarter at using web analytics to drive insights and better results for their messaging.

That, in and of itself, is interesting to note.

Those who have never done it, are now going to be forced to try something new, and those who has been using online advertising in their integrated marketing mix are going to amp up the volume on the areas where they can measure and affect change in the results more readily.

But wait, there's more...

These research reports are only looking at the online advertising side of Digital Marketing. More and more companies are still going to invest in their Digital properties in terms of pure strategy, design and build. They are looking for ways to "get their message out there." At the same time, more and more people are having their first brand interactions at the search box. Actually having a modern, user-centric and search engine friendly home-base is becoming core to daily operation - especially as more traffic is being driven to websites via the online social networks, social media and overall online chatter and buzz.

It's going to be interesting to see which of these numbers are accurate and if online advertising was able to be semi-recession proof.

By Mitch Joel


Comments Comments Feed
  • Posted by Steve Mast
    Mitch Joel

    Hey Mitch … great post. Your last point, “More and more companies are still going to invest in their Digital properties in terms of pure strategy, design and build.� You are bang on. Ever since the slow began I have felt a general increase in brands (big and small) taking a hard look at their digital properties (both public & private). Getting the basics right … looking to create great experiences over it will do for now. For some time now I have been asking a simple question, “Do you invite guests over to your home before cleaning it up?� No…then why do you spend so much time and effort driving potential new customers to your digital properties just to turn them away?

    Steve

    Reply
  • Posted by Mike Gero
    Mitch Joel

    Mitch:

    In a world where most numbers we see these days trend downward, social network growth is one of the few things bucking that trend.

    As companies come to grips with reduced marketing budgets/resources and likely recognize the need to get more "creative" and try new things, it certainly seems as though the investment made in social media will grow. While perhaps somewhat less tangible, from a measurable metrics perspective, it offers a great complement to traditional online advertising efforts.

    From Skittles, to Tide, to Jack-in-the-box to Nissan Canada (for better or worse) we're seeing more concrete evidence of this each week.

    Time will tell...

    Reply
  • Posted by Duane Brown
    Mitch Joel

    I don't think online advertising will be recession proof Mitch. It's growing but I do see it being affected a bit.

    The interesting side effect of a recession is that it makes people and companies look at their IP to refocus and get everything in order. They do this because they can't afford to spend the money all crazy and wildly like before. They need to make sure they are getting the most out of every dollar.

    However, they only do this during a recession I find. Once the recession is over, people tend to go back to their old ways. Old habits die hard as we tend to say in moments like these. I believe that the companies that will survive are the ones that get their business in order during this recession and they keep that razor focus on their business. This is no time to lose focus of your business.

    Reply
  • Posted by Aanna
    Mitch Joel

    i think the best way for advertising is the internet.. but i also agree with Duane Brown

    Reply
  • Posted by Rasul Sha'ir
    Mitch Joel

    As I read Duane's comment (and then Aanna seconded his idea) my question would be - what is the "old way" that people will be going back to? Newspapers are going out of business (not all) and new strategies are necessary. Facebook, google, and wikepedia (and the thousands if not millions of other internet realities) are here to stay. And they were changing the landscape before this recession hit. So even if people wanted to go back the "old ways" itunes, myspace, Apple, Hulu, Zip Car, Zappos, Amazon, etc, I think simply won't make that possible.

    Reply
  • Mitch Joel

    When compared to traditional advertising it becomes obvious the objective of marketing.

    The marketing is not what generates the sale or closes the sale. Marketing in any business is to attract a potential customer.

    It is the responsibility of the business, be it bricks and mortar or online to close and complete the sale.

    So the question is, will advertising decline? Well to answer that question then simply ask yourself, does your business still need a flow of potential customers?

    If there is a replacement for advertising, online or offline, then maybe.

    Sure businesses have tighter budgets now, but should they increase their potential customer flow or let it dwindle in times of a recession?

    Simple answer, never let the customer flows dwindle. Cutting costs and expenses is important when revenue drops, but cutting expenses will not cause revenues to increase. Only increasing customer flow or web traffic will.

    Cost per click and Cost Per Action Online Advertising is a wiser investment now more than ever as businesses begin to measure the quality of marketing efforts and the ROI.

    Reply
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