With the recession looming, many businesses are trying to predict whether internet advertising will grow faster or decline like other forms.
Recent history is cause for pessimism. Between 2000 and 2002, during the dotcom recession, online ad spending in America fell by 27 per cent.
Yet the web has changed a lot since then, with banner ads evolving into search-click and “rich media” behavioural/brand engagement methods. All this makes spending on advertising much less speculative, and it starts to be treated instead as a cost of sales. This is one reason why online advertising should suffer less than other sorts.
Online marketing increasingly aims for awareness, consideration, preference and loyalty. This approach is more robust than TV or print ads.
Potential is also growing for embedded online videos and social networks. Their big weakness is that users go to social-networking sites to socialise, not to shop (as they might on search engines). Their biggest strength is that users spend so much time there. Two years ago 11 per cent of time spent online was at Yahoo and MSN, two web portals; now their share is down to 5 per cent, and 5 per cent of online time is spent at YouTube and Facebook. (Source: The Economist)
