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Loading ...Is the economy heading into a recession? Some will say yes, some will say no, and others are playing it safe with a “maybe” answer. However, what is plain for the eye to see is that advertising spending has definitely taken a plunge. In a study done earlier this month, newspapers suffered the most, losing 5.8% in ad revenue, while TV ad sales also dragged down the market, down 2.4%. However, there was a bright spot– the Internet, with display ad spending up 17.7%. The losses in ad revenue for both newspapers and TV may not seem that significant in the grand scheme of things, but the gains that occurred in Internet ad spending are something to focus on.
In a study of U.S. recessions, McGraw-Hill Research analyzed 600 companies from 1980-1985. The results showed that business-to-business firms that maintained or increased their advertising expenditures during the 1981-1982 recession averaged significantly higher sales growth, both during the recession and for the following three years, than those that eliminated or decreased advertising. With internet advertising becoming a cheap (cheaper) and easy option for companies (SEM, SEO, New Marketing, OO, OE, Outreach…), it is no wonder that during tough economic times these options are being exercised more frequently. The general public is shifting towards obtaining their information exclusively from the World Wide Web. With this in mind, companies are willing to focus the majority of their ad campaign on the internet, which correlates to the drop in ad revenue for the likes of newspaper and television companies.
One major business-to-business advertiser summed it up best. “When times are good, you should advertise. When times are bad, you must advertise.” With this holding true, companies are realizing that the internet is a more cost effective and efficient way to make their dollar work on the advertising front. Even if the economy takes a turn for the best, it can be predicted that the gains made in internet ad spending are going to continue to overshadow the ones from traditional media sources.
Filed under: Ad Budgets, Ad Buys, Ad Sales, Advertisements, Advertising, Attention Marketing, Brand Promotion, Branded Entertainment, Branding, Broadcast Advertising, Circumadvertising, Direct Marketing, Gift Economy, Marketing, Marketing Industry, Marketing Strategy, New Media Marketing, New Media Strategy, New Public Relations, Online Ads, Online Advertising, Online Marketing, Online PR
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Bravo, Kevin… this is perfect. Thanks for doing this… I would like to share my premise, here, however… I asked Kevin to write this blog post based on my premise, which is just experience, guy, and lots of daily readings of the WSJ, NYT, and the FT. Okay, here’s my assumption and my premise:
ASSUMPTION:
We’re going to have a recession. let’s just make that assumption. Usually, during a recession, ad revenues drop. My argument is that during a recession, people stay home more. Web surfing is cheap, amusing, plentiful, and also most amusing with broadband. While people may cut down cable, they will keep their Internet connection — and will hunker-down on the Internet while they’re low on personal spending money, on discretionary income.
PREMISE:
People will spend more money and there will be more ad dollars and marketing dollars spent online, SEM, SEO, new marketing, OO, OE, outreach, and online ad buys during a recession — and print, commercials, and radio spots will plummet.
Sounds like a white paper topic to me!
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