The future of online ad spend
For the first time in history, online ad spend in 2010 surpassed newspaper ad spend. Concerns about the slow growth of the economy appear to have been the catalyst behind the turnaround, according to Internet research firm eMarketer.
Online ad spend in the US increased nearly 14 percent last year compared to 2009. This is good news for B2B ad agencies, as online ad spend is projected to continue to rise two digits in each of the next four years, beginning with an improvement of 10.5 percent in 2011. The Internet’s share of total ad spending is expected to increase from 15.3 percent in 2010 to 21.5 percent. cent in 2014.
Search Engine Optimization (SEO) is expected to continue to be the number one brand advertising spend on the Internet; while video is likely to remain the fastest growing ad format on the web.
Final online spend figures for B2B Internet advertising agencies for 2010 are expected to increase 8 percent over 2009. While B2B marketing firms are expected to devote considerable financial resources to search pays over the next five years, Forrester Research Inc. also expects B2B agencies to invest more in display advertising, as well as mobile and social marketing.
So what are the factors behind the growing shift towards online B2B marketing? Research firms such as eMarketer attribute the increase in online ad spending to advertisers’ increasing realization that the Internet has become the primary source of information, social interaction, and entertainment for many American consumers.
In turn, this view has increased skepticism about the effectiveness of marketing campaigns through traditional media, such as print newspapers; an industry that expected to see an 8.2 percent drop in ad spending revenue for 2010, followed by a 6 percent drop in 2011.
News Sites: The Most Trusted Place to…
In the real world, most people assess whether or not to believe something based on the source. The same principle applies to online advertising.
Social networking sites such as Facebook and MySpace, and portal channels, including MSN Money and Yahoo News, are known for their ability to generate a large mixed demographic of user traffic.
While these sites may seem like an exposure gold mine for advertisers, research suggests that consumers are more likely to trust online advertising content found on media sites like espn.com and nytimes.com.
A study by the Online Publishers Association (OPA) found that 15 percent of loyal media site users would likely buy from the site’s advertisers, compared to 8 percent of portal loyalists and 4 percent of frequent users of social networks. Also, local ads are more likely to generate user interest on local media sites than on other local websites.
More online ad spend = smaller income pool
With online ad spending expected to continue its climb in the coming years, ad agencies will surely develop new creative methods to generate consumer interest.
However, the quality of content combined with a website’s reputation will likely continue to be the main components driving consumer interest in online advertising.