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As Belts Tighten Online Marketing Continues To Expand

Written by: Rob Lawson

Article Overview: What will be the impact of the global economic crisis on how businesses market themselves. The prediction is that the current trend to online consuming will rapidly accelerate over the coming year. It is also predicted that online marketing, due to its cost effectiveness and the ability to track and measure return on investment, will soar as well.

As Belts Tighten Online Marketing Continues To Expand

Unless you’re a glutton for punishment you may have started turning off the television of late. Aside from the Obama blip on the horizon, the global news has a limited range of bad, worse and dire. Especially when it comes to the economy.

If you are in business the bad news on TV might be good news for your marketing budget. You’re not the only one turning away from the box. Millions of people are turning online so they have more control over how, where and when they source their information.

Ride the wave of the existing online trend

Communication between companies and consumers, between brands and buyers is shifting away from traditional media to the online world. Television advertising is not going to cease any time soon. However, smart companies are already shifting significant marketing dollars online to initiate different relationships with their customers and be at the forefront of this evolution.

Recent statistics from major international research and audit companies show that spending on internet ads and marketing has soared in the last 12 months.

UK figures reported by Click Through marketing (drawn from Internet Advertising Bureau – IAB - and PricewaterhouseCoopers research) point to an increase of 28% in search marketing spending and 16.3% in display ad spending in the first half of 2008.

The increase is in sharp contrast to the overall decline in total UK ad spending of 0.7% (which would have been a total of 4.6% if internet advertising were not included in the figure).

Figures out from the same IAB research show that the USA is following a similar trend. Total internet spending in January-June 2008 was up 15.2% from the same period in 2007.

And as with the UK, overall spending on advertising is in decline. Emarketer research estimates that all of major US forecasters are predicting significant drops in newspaper, magazine, network TV and radio advertising. And while online advertising is tipped to slow slightly from 13.8% growth in 2008 to 13.4% growth in 2009, it is streaks ahead of other media in overall growth.

Okay, everybody’s doing it online – but why?

According to President and CEO of IAB, Randall Rothenberg, accountability is the single biggest factor influencing companies to shift marketing online. It is almost impossible to measure the impact of a television advertisement or billboard. But online advertising and marketing both have powerful capabilities to track WHO is looking and WHAT action (if any) they are taking in response to ads and campaigns.

Another compelling factor is the different kinds of campaigns that are possible online. The IAB report for second-quarter revenue (U.S) in 2008 shows that search revenue at 44% is way out ahead of banner advertising (21%), followed by classifieds (14%), lead generation (7%) and rich media (7%).

The unique thing about search advertising is that marketers only pay when a user clicks on their link. This creates an immediate and measurable relationship between what they are paying and how well it is working.

Because online campaigns can be targeted and measurable they have the capacity to produce a greater return on investment (ROI) than other media. Companies can easily track how effective campaigns are by including online calls to action. Campaigns can then be adjusted with minimal cost and effort to reflect customer desires and trends.

Going online makes sense for companies who need to trim expenditure. Not only are the up front costs lower (consider the difference in price of a prime time network TV advertisement and a Google Adword campaign), the results are more transparent.

You don’t have to be an e-business to benefit from online marketing

For online purchasing results it’s pretty hard to compete with the likes of eBay (totalling 56% of Australian online purchases in the first half of 2008, according to recent AC Nielson research). Airline and travel companies, online event ticketing and music downloads all compete for the next highest pieces of the online spending pie.

Of equal interest to WHAT people are buying online, is WHY else they are going online. If you can understand what drives people to use the internet you can then develop marketing strategies to offer and compliment what they are looking for. Aside from email, Australian users are logging on for banking and finance (25%), information search (13%), news and reference (7%), playing games (6%), chat (4%), online auctions (4%), business research (3%) and shopping (3%).

Forecast organization trendwatching.com predicts an increasing rise in cross promotions, and mutual marketing offers between companies. For example, UK mobile phone provider Orange gives customers access to concert and event tickets up to 48 hours before they go on sale via their gigsandtours program.

Creative online partnerships between businesses that offer customers genuine value is a powerful way to turn marketing dollars into revenue.

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Article Tags: 12 months, audit companies, bad news, blip, forecasters, forefront, global news, glutton for punishment, iab, internet ads, internet advertising bureau, marketing budget, network tv, news on tv, pricewaterhousecoopers, radio advertising, research estimates, smart companies, television advertising, world television



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