Web Ads Gains Up Despite Decline in Advertising Spending
October 10th, 2007 Posted in NewsDespite the fact that by the second quarter of 2007, total advertising expenses experienced a 0.3% loss, recent reports by TNS Media Intelligence show that online advertising continue to push further its market gains by a whopping 17.7% which means that despite the fact that many businesses spend less for advertising, most of them are shifting to Internet marketing strategies to sell their products and services. Internet spending which has a 17.7% share amounts to total profits of $5.52 billon as compared to the advertising expenditures through consumer magazines which has a 6.9% share, 3.6% for outdoor advertising and 2.8% for cable television.
“Still the Internet continues to take in a larger share of the pie, even as the total pie is shrinking,” said Jon Swallen, senior vice president for research at TNS Media Intelligence. “The Internet’s slice of that pie is getting larger primarily at the expense of newspapers, and to a lesser extent television.” The same report shows that other advertising categories which used to dominate the advertising industry are now experiencing its worst decline such as the newspaper which has been reduced to a mere 5.7% share, radio with its 2.7% and the 2.6% broadcast television. This clearly indicates a growing shift not only in today’s marketing strategies but also among the prevailing attitude of today’s buying public who are increasingly turning to the Internet for their shopping needs.
The newspaper industry which used to dominate the advertising industry has already been offset by online advertising but even the Internet ads posted on newspaper websites still fall short of the expected advertising growth rate as compared to the incremental revenue from Internet advertising in other websites and fail to cover the income lost with the decline of print advertising. For every dollar spent for a print ad, an online ad would only cost around 70 to 80 cents and the newspaper company would still have to cover the remaining 20 to 30 cents with every advertisement that decides to move online.
The recent decline in overall advertising expenditures could also have been brought about by the economic weakness being experienced today with the slow increase in retail sales, rising unemployment and waning consumer confidence. With the slow economic gains, most companies are tightening their advertising budgets. “The cutback in advertising is being led from the top of the market by big blue chip companies, manifesting itself in fewer brands being supported with ad money. It indicates a retrenchment,” Swallen said.
But there is no foreseeable end to the Internet’s lead in the advertising industry. Online advertising is indubitably the most effective way to advertise and sell your services and products. Unlike other advertising strategies, Internet technology is able to cope up with speeding changes in today’s business markets making it a truly dynamic way to reach out to customers and effectively increase business profits. What used to be advertised on paper and ink can now be more effectively done electronically but at a far lesser cost with today’s growing borderless World Wide Web.
