The changing online ad landscape
Thursday, May 1, 2008/
Spending on conventional forms of online advertising such as banner and search ads could be about to decline significantly, according to a new study reported by ClickZ.
Online research company Borrell Associates argues display ads, such as banners and pop-ups, and ads connected to search terms, are going to be overtaken by online promotions as the most popular form of internet marketing in US markets.
Borrel Associates predicts that spending on internet banner and pop-ads will peak this year at $US12.6 billion before hitting the wall, so much so that we could see less than half that amount spent on display ads over the next four years.
The same goes for search advertising, although the drop off is likely to be a bit less dramatic –the report predicts spending in that area is likely to fall back slowly from a peak of $US16.9 billion this year.
They are likely to be replaced, according to the report, with more spending on online promotions involving things like free computer games, giveaways, vouchers and online contests.
According to Borrell Associates, spending on online promotions of $US8 billion last year is set to nearly triple over the next five years, to an annual $22.8 billion spend.
“What’s driving it is an overall dissatisfaction or nagging feeling on the part of advertisers that their advertising isn’t working, or that they’re overspending on it,” Borrell told ClickZ. “With the internet, they can go straight to consumers. If they’re having a sale, they can put it up on their web site and consumers will come to them, and if their web site is good enough, consumers will keep coming back.”
Be honest about your situation: How vulnerability helps businesses thrive Sue Parker DARE Group founder
Own it: The 10 things you need to do to manage your personal brand Lisa Stephenson Who Am I Projects founder
Six invaluable lessons: What 20 years in aged care taught me about being an entrepreneur Natasha Chadwick NewDirection Care founder
An entrepreneurial superpower: Eight tips to help develop resilience Adala Bolto ZADI Training co-founder
Going through a lull? Five areas you should invest in when sales drop Tamara Alaveras and Sonia Majkic 3 Phase Marketing co-founders
Stop telling us how busy you are, it's boring and charmless Ian Whitworth Scene Change co-founder
Blandification™ and the state of modern branding Jeffrey Oley The Offices co-founder
Why you should find the right role for the right person — not the other way around Bruce Stronge Outfit founder