Times have changed
Traditional media has lost its hold on advertising budgets.
Even big companies are moving a large portion of their ad spending online, with companies like Pepsi foregoing Super Bowl ads for online marketing projects.
There’s a reason marketers think of online advertising as particularly effective: the ability to put ads in front of audiences actively looking for information allows marketers to tap into a market more prepared to buy than those audiences watching television or reading a newspaper. Furthermore, the advertising opportunities online go far beyond those related to search. With the growth of video on demand through sites like Hulu and Youtube, as well as content sites providing information on every imaginable topic, audiences are also spending more time online.
Advertising Cost Comparison Chart
|
Medium
|
Cost
|
Campaign Term
|
Audience Reach
|
| Local Television | 30 seconds in top 10 market: $4,000 to $45,000+. | Purchased throughout year or scheduled in flights. | Large number of consumers but a small target audience. |
| Network Television | 30 seconds in prime time: $80,000 to $600,000. | Purchased in small flights due to high cost. | Very high number of consumers with very low ROI. |
| Cable Television | 30 seconds in prime time: $5,000 and $8,000. | Purchased throughout year or scheduled in flights. | Lower number of consumers but offers better audience targeting. |
| Radio | 60 seconds: $200 to $1,000. | Purchased in flights that center around specific events. | Depends on station. Good reaction numbers but at a high cost. |
| Magazines | National Magazine: $50 per 1,000 issues. Local magazine: $120 per 1,000 issues. |
Sold as annuals, specific months of publication or special issues. | Depends on circulation. Response rates very low. |
| Direct Mail | Letter-sized envelopes: $15-$20 per 1000. Single sheet newspaper insert: $25-$40 per 1000 issues. |
Unlimited. | Very low response rate. |
| Search Engine Optimization | $15,000-$75,000 per year. | Typically in 6 or 12 month terms. | Exceptionally high ROI as visitors are seeking your products and services and return to become regular customers. |
“We are in one of the most difficult economic slumps in decades. Interactive is one of the advertising sectors that has been least affected,” said Randall Rothenberg, President and CEO of the IAB. “In recent years the digital revolution has driven a transformation of how consumers experience advertising and media. As the economy improves, we’re confident that brands will devote an even greater share of their budgets to reaching consumers as they make interactive media a larger part of their lives.”
While the overall advertising market has continued to be impacted by current economic conditions, marketers are allocating more of their dollars to digital media for its accountability and because consumers are spending more of their leisure time online,” said David Silverman, PwC Assurance partner.
The Internet continues to grow as the most preferred media channel, with 37.7% of U.S. consumers identifying it as the media that they can’t live without, above television at 21.6%. The percentage of consumers who purchase from mobile phones has grown from 10% in 2009 to 13% in 2010. Pricing and product research via mobile devices has also grown significantly during the same time frame, says the report.
Social networking is increasingly important for online retail, accounting for more than 3% of all visits to the top 500 online retail sites. More than 60% of U.S. adult online users say that they have visited a social network during a typical month. 43% of social network users say that they frequent social networking sites multiple times per day.
Email marketing volumes are expected to increase 15 to 20% for the upcoming 2010 holiday season, compared to the same time period in 2009. Multichannel retailers registered the largest increase at 42% from 2008 to 2009 holiday seasons.
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