2008: Web takes bigger share of ad spend while forcing ad houses to reinvent themselves
By Leah McBride Mensching, Wednesday 2 January 2008 at 23:39 :: Advertising :: #1041 :: rss
The Internet's rising prominence and domination on the media landscape isn't just changing the way newspapers do business. Advertising agencies are being forced to reinvent how ads are created, with clients even asking for changes in the way the firms are structured, The Wall Street Journal reported Wednesday.
In the past, very few advertisers spent more than five to 10 percent of their marketing budgets online, but as social networking sites and online video continue to boom, ad experts are predicting a huge jump in online spending this year.
Global advertising spend in 2007 is estimated to have reached US $454 billion (€308.1 billion), according to Publicis Groupe's ZenithOptimedia.
ZenithOptimedia predicts Internet ad spend to overtake radio in 2008, and eventually overtake magazine advertising spending in 2010. The group forecasts global ad expenditure across all major media to grow 6.7 percent in 2008, up from a 5.3 percent growth rate in 2007.
According to the Wall Street Journal report, via MediaInfoCenter.org, softness in the economy is only helping the Internet, which is easier to measure reach than other media, and can also be cheaper – two very attractive qualities to advertisers who need to stretch marketing dollars.
The Wall Street Journal listed five trends to watch for this year:
1. New structure: Marketers want executives who create TV and newspaper ads to cooperate more with those who create online ads and those who do other duties, such as researching consumer behaviour.
2. Screen wars: Television screens are popping up all over the place, and will continue to do so in 2008 as advertisers struggle to reach consumers in an increasingly fragmented media world. The screens will increase their presence in grocery and department stores, elevators, gas stations and waiting rooms.
3. House guest: Ad agencies will rely less on techniques such as focus groups and online polls to learn about consumers, and instead try having researchers spend long periods of time with them to learn more about how they live.
4. Green backlash: In the United States, environmental marketing gained ground in 2007, with companies touting products and services as being eco-friendly. Some in advertising expect a backlash from consumers who are unsure whether those companies are living up to their promises.
5. The antisocial movement: The social networking boom could be dampened by privacy issues, as well as the fact that consumers only have so much free time. “Nobody has 5,000 real friends,” Tim Hanlon, senior vice president of Denuo Group, told the Wall Street Journal. “At the end of the day it just becomes one big cauldron of noise.” This means marketers will need to use social networking sites more as consumer-research tools and less as a way to sell products.
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