Thursday, December 17, 2009

Follow The Money: Web Based Ad Spending

In spite of the recent crisis, the growth of internet advertising continues to accelerate...

According to the Economist, (bold highlights mine)

``WHILE the economic downturn has hit advertising, the internet has been busy building market shares. Global ad spending is estimated to fall by over 10% this year, according to ZenithOptimedia, a media firm. The internet will account for 12.3% of all advertising spending in 2009, up from 10.1% last year, and double what it was in 2005. Online ad spending in Denmark, a country with near universal broadband penetration, overtook TV spending in 2008, and is forecast to be almost a third of the ad market by 2012. In America, television advertising still dominates, though advertisers are moving from newspapers to the internet."

This is a very significant development for it shows that the major advertising trend have simply been following where the money is.

one, it reveals of the trend towards the vastly deepening of web based connectivity worldwide.

two, web based connectivity have been founded on highly segmented or niche based-marketing or audience.

In a highly competitive free market sphere, content isn't only about "specifically tailored information" but having to tap the right "community" or "tribe".

The recent recession appears to have caused a shift in web users preference, for example, from online auctions to retail discounts.

This from 24/7,(bold highlights mine)

``Based on data from Hitwise comparing US traffic market share from January to figures from November Ebay (NASDAQ:EBAY) lost 37% of its visitors. Craigslist lost 43% of its traffic, making it the largest loser among the top 25 sites. Neither number is surprising. Ebay’s earnings have been lackluster. Classified postings for apartments and jobs at Craigslist may have been hurt by the recession.

``Other sites that had sharp drops in visits include Yahoo! (NASDAQ:YHOO), Yahoo! search, and News Corp’s (NYSE:NWS) MySpace all of which were down more than 20% during the measurement period. The MySpace figure is not surprising. The social network has been losing members to Facebook. Among the top 25 sites, Facebook has the largest gain, up 236%. The Yahoo! figures support data from other research firms covering search traffic. Yahoo! has been losing ground to Microsoft’s (NASDAQ:MSFT) Bing and Google (NASDAQ:GOOG). Google was the most visited of all sites measured by Hitwise and its traffic rose 7%.

``Among the largest e-commerce sites, Wal-Mart (NYSE:WMT), the 2oth most visited site among all US destinations, had a 64% increase in visits compared to Amazon (NASDAQ:AMZN), the No. 15 site, which had a 26% increase. Wal-Mart and Amazon are locked in struggle for holiday shoppers and both have cut prices on popular items including e-books and DVDs. Visits to Target.com (NYSE:TGT) were 69% higher. Best Buy (NYSE:BBY) visits rose 23%.

``Other notable increases among large sites were MSN, up 58% and YouTube which rose 109%, confirming the trend of improving visits to online video sites."

In short, as the global populace is being driven into the web, the prevailing economic circumstances and technological benefits appear to be driving web user's preference.

three, if Denmark is to used as prospective benchmark for ad spending then even television spending could be compromised by the web.

lastly, the internet have dramatically and immensely been changing people's lifestyles and the conduct of businesses worldwide, this implies that traditionalism or traditional metrics will fail to account for the complex and dynamic changes that drives today's information age.

This would make oversimplistic prescriptions by experts based on past paradigms filled with the risks of unintended consequences.

Moreover, the profusion and democratization of information via its accessibility would likely make markets more efficient, in spite of repeated government interventions.

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