communication is essential to business making and it involves more than the ability to name your product, write a tag line or a press release. It's an intricate, rational and scalable effort and, let's face it, not anyone can do it.

4/24/2009

Online advertising and how it fares

To everyone's surprise (or maybe not) Q1 results for the ad market were dire especially in the online and print segment. According to estimations here (read initially here, thanks Orlando) online advertising is down by between 20-30%, a decrease which places it in a worse position than its older fellow media, TV and radio, but far above print which has managed to drop, according to the same source by a staggering 44%.

What does this mean for the Romanian online? Well, if you ask me, nothing. And I will explain why I think it is so.

The 30% drop is monitored spend, and the only monitored spend we have in Romania is media spend (as witnessed by the fact that the people providing the numbers are all managers of media selling agencies). More specifically I mean classical media spend which can be measured in impressions. The unmonitored digital spend, however, includes a lot more: beyond banners (or special projects), PR digital projects, partnerships and co-promos, blogvertising direct through blog owners, social media initiatives, in-house SEM as well as the now emerging on-network deals (like through ThinkDigital's Oridian network) - which, I bet you, were not counted when these statistics were produced.

Secondly, the weight of the digital market in Romania CANNOT be measured exclusively in budgets spent on buying display but should also count the money behind sustaining post-click engagement (like websites, landing pages, online content, rich media). Estimations about how the digital market is doing should look at the development of Internet investory and the number of viable and long-term online projects developed by brands. That also is money spent by brands to grow digitally even if it is not money given to publishers per se.

Thirdly, in accounting for the increase or decrease, we must consider clutter on top 10 display carriers and segmentation due to increasing inventory mentioned above. The more websites we need to cover, the less money goes to the classical hubs of display like gsp.ro or evz.ro. Broker agencies may be losing out from overbooking and publishers becoming sold-out on display but also from special projects going to off-portfolio sites.

The simplest explanation - people cut what they think is a nice-to-have - may be right but there is a far more complex picture online.

2 comments:

FreeKii Ads said...

Online advertising is receiving a lot of bad press lately about its effectiveness.

It is not advertising that is suffering, since only the major players are exposed, the perception is that there is a decline. Coincidentally there is an economic recession which paints the doom and gloom for all industries. Online Advertising is on a major growth curve.

The appearance of an advertising budget decline, is actually the expansion of advertising space. The number of places businesses can advertise now is growing daily. This causes the advertising to be spread thin giving the appearance of the decline.

There are many new ad networks now experiencing rapid growth compared to the rate of growth of the existing well known networks. This is a normal occurrence during a major growth trend in any industry. Take the auto industry for example during the 1940s and 1950s. They had more brands of auto makers than we can even remember. The same growth is occurring with online advertising.

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david said...

If I were to wager a guess at why, I’d say that users don’t “browse” forms. The interaction style users engage in with forms is different, and requires its own study and design best practices.


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