Should the online advertising industry try to freeze the economic meltdown?! Dumb meets dumb...
To start on a positive note, the number of windows popping up aka
online ads are on a decline since the past few months. Positive for the surfer, given the irritant value that comes combined with pop up ads. According to ComScore’s AdMetrix data, internet surfers were exposed to 12% less display-ad impressions per page view than they were a year ago. Whether it’s a conscious decision of the advertisers present on the digital media or just a mere coincidence, the fact is that the falling growth rate of the online ad industry is good news for advertisers! Surprised? We called it, dumb meets dumb. Well, a study conducted by Dynamic Logic, Starcom and DoubleClick in 2007 found that a 15% increase in ads on a page results in about a 10% decline in click-through rates. Well, if that is not a positive correlation, read on to get confused a bit more.
The global online ad industry is supposedly valued at somewhere around $23 billion and has registered a double digit growth from the past five years. Fortune 500 companies like Google, with more than 98% of their revenues from online advertising, are leading examples of the power of this industry. Expectably, the tanking economy contributed towards the cutting of advertising budgets of many companies. But most interestingly, there was a set of companies who shifted to the digital media in the period of this economic meltdown. Before you award us the Pulitzer, do read the inference, which is quite simple. The group of companies were those who were earlier relying on the traditional mass mediums to keep their brands very much in the sight of the consumer. Simple analysis shows how, in order to save increasing advertising costs in traditional media, these companies moved their budgets more towards online advertising in order to equate brand recall with investments. But the question then comes, when – and if – the global economies start moving out of the negative phase and recessionary trends, would these companies withdraw their current budgets from the online space?
And if that will be the case, it would surely result in making times worse for the players in the online advertising industry. Anjali Hegde, Vice President, Interactive Avenues does confirm, “As the worldwide economies will stabilise, the online ad agency will see a fall in the growth rate.” However, Hegde takes no time to highlight the fact that smart marketers – given the positive feedback with their initial online advertising experiments – will still stick to digital arena in the long run. Talking on similar lines, Deepak Singh, Director, Young Turks asserts, “The online ad industry will see a fall in growth rate as the economies will recover from this downturn. However, the fall will not be very significant.” Clearly, the prevailing economic slowdown is perhaps a blessing in disguise for the online ad agencies and online advertising media as – given their relatively lower advertising rates – they seemingly have a sustainable and strong competitive advantage over their nearest rivals, namely print and electronic media. Also is the fact that once a client, who perchance had never tested and tasted the power of online advertising, does so, there is good enough chance that the client might just stick on, irrespective of the rival media offering similar rates of advertising. Well, Christmas is just around the corner and it just seems it’s the start of an unexpected war of the fallen worlds... Duh!
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2008
To start on a positive note, the number of windows popping up aka
online ads are on a decline since the past few months. Positive for the surfer, given the irritant value that comes combined with pop up ads. According to ComScore’s AdMetrix data, internet surfers were exposed to 12% less display-ad impressions per page view than they were a year ago. Whether it’s a conscious decision of the advertisers present on the digital media or just a mere coincidence, the fact is that the falling growth rate of the online ad industry is good news for advertisers! Surprised? We called it, dumb meets dumb. Well, a study conducted by Dynamic Logic, Starcom and DoubleClick in 2007 found that a 15% increase in ads on a page results in about a 10% decline in click-through rates. Well, if that is not a positive correlation, read on to get confused a bit more.The global online ad industry is supposedly valued at somewhere around $23 billion and has registered a double digit growth from the past five years. Fortune 500 companies like Google, with more than 98% of their revenues from online advertising, are leading examples of the power of this industry. Expectably, the tanking economy contributed towards the cutting of advertising budgets of many companies. But most interestingly, there was a set of companies who shifted to the digital media in the period of this economic meltdown. Before you award us the Pulitzer, do read the inference, which is quite simple. The group of companies were those who were earlier relying on the traditional mass mediums to keep their brands very much in the sight of the consumer. Simple analysis shows how, in order to save increasing advertising costs in traditional media, these companies moved their budgets more towards online advertising in order to equate brand recall with investments. But the question then comes, when – and if – the global economies start moving out of the negative phase and recessionary trends, would these companies withdraw their current budgets from the online space?
And if that will be the case, it would surely result in making times worse for the players in the online advertising industry. Anjali Hegde, Vice President, Interactive Avenues does confirm, “As the worldwide economies will stabilise, the online ad agency will see a fall in the growth rate.” However, Hegde takes no time to highlight the fact that smart marketers – given the positive feedback with their initial online advertising experiments – will still stick to digital arena in the long run. Talking on similar lines, Deepak Singh, Director, Young Turks asserts, “The online ad industry will see a fall in growth rate as the economies will recover from this downturn. However, the fall will not be very significant.” Clearly, the prevailing economic slowdown is perhaps a blessing in disguise for the online ad agencies and online advertising media as – given their relatively lower advertising rates – they seemingly have a sustainable and strong competitive advantage over their nearest rivals, namely print and electronic media. Also is the fact that once a client, who perchance had never tested and tasted the power of online advertising, does so, there is good enough chance that the client might just stick on, irrespective of the rival media offering similar rates of advertising. Well, Christmas is just around the corner and it just seems it’s the start of an unexpected war of the fallen worlds... Duh!
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2008
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