New Media Boom: Advertising On Internet Soars
A preview of things to come, as new media overtakes old media, and more of the world becomes wired with high-speed internet:
The internet will overtake radio by next year and become the world’s fourth-largest advertising medium, a year earlier than forecast.Internet advertising--and Internet marketing in general--will steadily make use of growing means of data collection provided by the Internet users themselves (for example in behavioral targeting) and will provide more customized, user-specific advertising. Determined by data such as online behavior, geography, user preferences, etc., marketers will be able to deliver timely and more useful ads to laptops, Blackberries, and cell phones. Go to a coffee shop and use the free WiFi to browse for doggie treats? An ad from the pet store around the block may be instantaneously sent to your wireless device, offering special deals and discounts.
Global spending on internet advertising increased from $18.7 billion in 2005 to $24.9 billion (£12.6 billion) last year, according to ZenithOptimedia, the media-buying agency.
The Middle East and Asia are driving a boom in global advertising spending. Zenith predicted a spike of 7.7 per cent in spending in Asia in the run-up to the 2008 Olympic Games in Beijing.
In the Middle East and Eastern Europe, advertising spending is growing faster than in North America and Western Europe, which are “maturing rapidly” as advertising markets, Zenith said.
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In addition to the Olympics, the US presidential election and the European football championship in Austria and Switzerland next year will be the biggest contributors to overall growth during the next two years. However, Zenith noted, the market should brace itself for a fall in revenues after those big events end.
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Mr Phillipson added that the shift towards online advertising was likely to grow as companies come to regard it as less risky and more transparent. Most companies pay on a “per click” basis for search-based advertising, which means that they pay only for the leads generated by the advertisement.
Search engines are the fastest-growing form of online advertising and companies bid to be associated with keywords that are used in searches. The use of annoying pop-ups is declining, but new forms of online advertising, such as video streaming and expanding banners, are becoming more widely used. Behavioural targeting, in which advertisers follow consumers’ internet use, is another growth area.
By providing more timely and useful ads to customers, businesses can increase conversion rates and not repetitively pester potential customers with generic offers, or for products that might not interest them in the first place.