Web Advertising Making A Comeback
From Sun-Sentinel
After bogging down in the recession, Internet advertising is regaining the momentum that has made it the decade's most disruptive marketing machine.
The signs of an online revival are emerging even while advertising in print and broadcasts remain in a slump that has triggered mass layoffs, pay cuts and other upheaval.
Companies seem reluctant to spend on elaborate online campaigns, such as the highly visual display ads on Yahoo.com, partly because they tend to be more expensive and not as well-aimed as search ads. The reticence is the main reason Yahoo reported its third-consecutive quarterly decline in ad sales Tuesday. Yahoo's ad revenue fell 12 percent after declining 13 percent in the first half of the year.
Even so, Yahoo isn't being hit as badly as newspaper publishers, and Google SEO is as important as ever.
The signs of an online revival are emerging even while advertising in print and broadcasts remain in a slump that has triggered mass layoffs, pay cuts and other upheaval.
Companies seem reluctant to spend on elaborate online campaigns, such as the highly visual display ads on Yahoo.com, partly because they tend to be more expensive and not as well-aimed as search ads. The reticence is the main reason Yahoo reported its third-consecutive quarterly decline in ad sales Tuesday. Yahoo's ad revenue fell 12 percent after declining 13 percent in the first half of the year.
Even so, Yahoo isn't being hit as badly as newspaper publishers, and Google SEO is as important as ever.
Internet advertising was just about the only bright spot in the third-quarter reports of newspaper publishers Gannett Co. and McClatchy Co. Meanwhile the companies are dealing with steep declines in print ads — an imbalance most analysts predict will take years to address.
The reality is that much of the advertising in long-established media, particularly in the classified sections of newspapers, will never rebound to pre-recession levels, said Lauren Rich Fine, a longtime media analyst who is now a professor at Kent State University.
That grim outlook contrasts with the fact that advertisers are allocating more of their budgets to the Web. Rates are less expensive, and the returns on online ad investments are easier to quantify.
These trends will give Internet advertising 19 percent, or nearly $87 billion, of the worldwide ad market in 2013, up from just 4 percent, or about $18 billion, in 2004, according to PricewaterhouseCoopers and Wilkofsky Gruen Associates.
That would make the Internet the third-largest marketing medium, and search engine optimization one of the most important investments a company can now make in its future. Television is expected to remain on top, with $168 billion, or 36 percent of the global ad market, down from 35 percent in 2004. Newspapers would still be No. 2, but their $92 billion in advertising revenue is projected to account for 20 percent of the global ad market, down from 28 percent in 2004.
For now, though, some types of Internet advertising — real estate, travel and help-wanted, in particular — remain in the funk they fell into in the first half of the year, when U.S. ad revenue on the Web fell 5 percent. (That was still far better than the 12 percent to 29 percent declines suffered by U.S. newspapers, radio stations and television broadcasters.)
The most compelling evidence for an online recovery is being made by Google Inc., whose search engine powers an online network that has grown from $411 million in worldwide ad revenue in 2002 to more than $22 billion annually now. The company's ad revenue rose 8 percent in the third quarter, the fastest pace so far this year, and Google's executives indicated they are gearing up for even more rapid growth in the months ahead.
The greater flexibility online makes it easier to gauge the mood of consumers by buying Internet search ads before ramping up spending in other areas, Fine said.
"I think a lot of (advertisers) are experimenting right now, hoping they can stimulate a little more demand."
