Sky Not Falling for Online Advertising

A grim reality for media sellers is that a weak economy triggers marketing belt tightening that almost always includes spending less on advertising. Such reductions occur because they may be a preferred alternative to cutting expenses in other areas such as payroll. Also, cutting back on marketing spending may be viewed as a short-term situation that can be reversed relatively quickly. In today's uncertain economy, it is not surprising to see marketing spending cut back, but perhaps surprising is that at least one area is seeing more spending... online advertising.

A report released by the Interactive Advertising Bureau indicates that Internet advertising revenues increased 11% in the 3rd quarter compared to the same period last year. Any growth at all is noteworthy; double-digit growth is astounding. The reasons are simple: 1) online ads allow for fairly precise targeting, and 2) marketers like that online ads allow for easier tracking of effectiveness than ads placed in traditional media. Whether it be the number of clicks an ad generates or tracking sales that occur from an ad that directs consumers to a URL created specifically to track ad performance, online ads enable marketers to better understand how well (or poorly) their communication efforts perform.

The need for advertising has not diminished just because of a slow economy. In fact, one could argue it is the time when advertising is needed most. What has changed is the need for greater accountability in how ad dollars perform, and online ads meet this need.

Link: Response Magazine - "Internet Advertising Revenues Up in Q3"

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