The 64 Billion Dollar Question


Where is advertising heading in the twenty-first century?  That’s the one question that every business owner needs to ask themself.  Why?  Because if you don’t know the answer to this question, then you can’t devise an effective long term marketing plan.

Back in 2009 $155 Billion was spent on local advertising in the US. Yet only 7% of that figure was spent online. Why so small a percentage do you think?  Was it due to the fact that online advertising was priced out of the reach of most small businesses?  Hardly.  A month’s worth of online advertising on Google can cost less than a couple days of display ads in a major metropolitan newspaper. Was it because online ads are only good if you are looking to promote your products on a global basis?  That may have been the case back in 1995, but the birth of Geo targeting has provided the solution to that conundrum.
So what’s the real reason why so many businesses seem to be reluctant to embrace online marketing?  Especially when it is predicted that 50 percent of local advertising will shift to electronic media in the next 5 years?

Personally, I believe that inertia is the real culprit.  It seems to me that all too many businesses have been clinging desperately to old style print and broadcast advertising simply because that’s the way they have always done business in the past. 

Are you using yesterday’s technology to promote your business today?

Well let’s take a look at print advertising, shall we?  Face it, this medium has been around for a long, long time.  Up to the end of the twentieth century, it was one of the dominant forms of advertising.  But it’s starting to show its age.

Sorry to say it, but most traditional forms of print advertising have been in decline for years.  In 2009 alone, industry analysts reported that newspaper readership across the US dropped 28 percent.  That’s huge!  Nearly the same holds true for Yellow Page advertising. Last year U.S. yellow pages revenue declined 11.8%. A recent quote from Simba Information predicts that the industry’s revenue slide is expected to continue in 2011 as the transition from print to digital products continues.” 

Let me ask you, is anyone out there still using the Yellow Pages?  What do most people use instead? Google.  If you have been paying attention to the news you will remember hearing about Google and Facebook duking it out for number 1 visited site on the Internet, right?  But what you probably didn’t catch was the fact that Google all by itself currently accounts for nearly 6 and a half percent of all Internet traffic. 

Getting back to traditional broadcast venues, just like print advertising, TV and radio have been feeling the pinch.  You have to feel for the poor tv networks. In 2010, they took a 12% hit in advertising revenue compared to 2009.  Yet during that same year the Yankee Group reported that although TV advertising as a whole dropped, internet advertising actually increased – in part due to the popularity of, get this, “online tv”.  Since the advent of Tivo, many viewers simply switch TV ads off.  Even if they don’t, nearly everyone on the planet has the ability to mute TV ads.

Of course, there’s always radio.  In 2010, while radio ads were experiencing a double digit dip in listenership, online radio revenues actually rose more than 500%.  So what does that tell you?

It seems obvious, that as Americans continue to become ever more connected, their reading, watching and buying habits are following suit. Conversely, more traditional advertising media, such as newspapers, direct mail and TV commercials, continue to decline in both popularity and profitability. 

Now let’s take a look at electronic media.  In 2010 Google took in more than $26 billion in revenue.  And that trend is not expected to end any time soon.  In fact, Google reported revenues of $8.44 billion for the quarter that ended December 31, 2010, an increase of 26% compared to the fourth quarter of 2009.

Online Ads Break Out of the Box

Why the sudden groundswell in online marketing?  It seems that technology is one driver. With the advent of such things as the i-Phone, i-Tunes, Netflix and Kindle, American consumers are shifting more and more of their viewing, reading and buying habits to online media.  And I’m not just talking about their laptops.

How many of you have a smart phone?  Well guess what, so do many of your customers.

With 72% of all mobile users in the US using text messaging, mobile marketing is in overdrive.   eMarketer predicts that spending on text message marketing, mobile banners, video and other mobile based media to crack the one billion dollar mark in 2011. Growth from 2009 to 2010 almost doubled at 79% with next year predicting another increase of 48%.

Let's face it, online marketing is here to stay; And with good reason.  As you have seen, most traditional forms of advertising are in decline.  What you may not be aware of is the underlying cause.  You see, print or broadcast ads are based on what is known as “The Shotgun Approach,” which predicates that if you send enough shot into the air, sooner or later you will bring down a bird.  Face it, even at its best, this is not a very efficient form of marketing. 

Fortunately, online marketing doesn’t use this principal.  People go online and key in their area of interest.  They are then presented with a list of vendors who can satisfy this desire.  This makes online advertising more like a smart bomb than a shotgun.

Then all you as a business owner has to do is intersect with this traffic and give that person a reason and means of doing business with you, right? Well, almost right.  As you will see in upcoming blogs, the devil to creating, tweaking and managing a successful online advertising campaign is in the details. 

Carl Weiss is president of Access-JAX, which specializes in online lead and sales generation.  Call him at 904-234-6007 for a FREE Web Presence Analysis that will show you how your company stacks up online. http://access-jax.com http://jacksonville-video-production.com



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