Online Advertising Budgets Remain Strong in an Uncertain Economy
According to recent forecasts by companies such as Carat and eMarketer, online advertising will continue to grow despite a decline in overall advertising expenditure.
Leading media communications agency Carat revised previous forecasts issued in March, which predicted 2008 growth in advertising expenditure to reach 6%. Now the agency is predicting 2008 figures to increase by only 4.9%. Jerry Buhlmann, CEO of Aegis Media, said, “It is clear that the worldwide economic issues affecting businesses are having an impact on where and how advertisers spend their money…Similarly, while TV’s share of spend has stabilized, internet advertising is continuing to drive spending ahead of other sectors in nearly every region. Internet is set to overtake radio this year to become the world’s third most popular medium, behind TV and print.”
“But changes in consumer behavior aren’t the only reason for this,” Buhlmnn continued. “With search now central to the planning and execution of any campaign, online media brings a greater level of accountability not just to itself but to TV, print and other forms of advertising. This is why we are predicting further strong growth for internet, even when advertisers are cautious in many of the other sectors.”
Earlier this summer Advertising Age reported that although Procter & Gamble had cut costs by closing a manufacturing facility and eliminating hundreds of jobs at Gillette’s South Boston headquarters, its advertising budget would remain steady at around 10.4 percent of the company’s annual sales. Instead of spending as much on traditional media, the company would devote more to alternative channels.
A recent LA Times article summed up the current trend in total online spending as significant. In the article, eMarketer analyst David Hallerman said, “Complaining about an online-ad slowdown is like griping about a slugger who is on pace for 40 home runs after hitting 50 last year.” eMarketer expects online ad spending to grow to $25.9 billion this year and $30 billion in 2009, from $21.1 billion last year.
Online advertising’s resistance to the economic woes plaguing other media is a tribute to the medium itself. As Buhlmann stated, interactive marketing is now, more so than ever, the cornerstone of today’s successful media mix. Most campaigns integrate online spending at least at some level. Amid diminishing budgets, advertisers cannot afford to miss out on less costly, targeted opportunities to reach their online audience. So, the growth continues.
Rachel
To see all of Carat’s forecasted figures, click here.
To visit Advertising Age, click here.
To read the Los Angeles Times article, click here.
Tags: Advertising Expenditure, Carat, Economy, eMarketer, internet, TV
