Saturday, November 29, 2008

Impact of Economics on Online Advertising

The Economist states in "Not Ye Olde Banners" here:

"Mary Meeker, an internet analyst at Morgan Stanley, ... estimates, if the economy stops growing, ad spending is likely to fall by 4%. If the economy shrinks by 2%, overall ad spending may fall by 10%."

The fantastic thing about online advertising is that with the change in available technology come shifts in the marketing methods... hence, one does not have to wait 25 years to become old school that can happen in 25 weeks.

Here is an example of how online advertising can connect the analogue marketing's serialization of consumer engagement into multi-point choice for the consumer, as stated in the article:

"Mr Rothenberg (Interactive Advertising Bureau) gives the example of a rich-media ad for Kraft, a food company, in which a yummy image raises brand awareness, a click reveals a recipe that increases consideration, another click provides coupons and yet another click initiates a game that can be shared with friends. Marketing managers can therefore defend their online budgets as being both above (awareness or consideration) and below (preference or loyalty) the line."

I believe the economics of today will drive what I have hoped for - innovation leading towards affective online advertising delivering results that can be measured i.e. (and as Ted McConnell puts it) Performance-Based Advertising. The pressure will be on all - the brand manager, the creative/agency, the inventory holder/distributor.

See my previous blog "Social Networks & Advertisement" here.

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