Friday, December 5, 2008

Internet Ad Spending One Bright Spot in that Biz

A new study by the Direct Marketing Association points out that Internet ad spending is the one bright spot in a very gloomy world for advertisers. DMA measures email, SEO (search engine optimization), web sites, banner ads, affiliate marketing and other lead generation programs as advertising.

Research shows that a growing number of advertisers are allotting up to 20% of their ad budgets to the Internet. Total advertising spending in 2008 will be $339.9 billion. Direct marketing is slightly more than 50% of the total.

Anne Frankel, senior research manager of DMA, broke out the Internet advertising stats for us. She reports that:

It was $24.7 billion or 24.1% of total ad spending in 2008.

It is the only growth spot in advertising right now.

It is expected to climb about 3.7% in 2009, even as the rest of the ad market contracts.

Breakdown of Total US Ad Expenditures, 2008 (Billions of dollars)

Direct mail (catalog & non-catalog)$61.7
Telephone marketing $86.6
DR newspaper $38.8
DR television $75.9
DR magazine $18.2
DR radio $18.7
New media & other including billboards, etc. $39.4

Source: Direct Marketing Association, 2008

The growth in Internet advertising is despite the fact that its impact in many cases, other than affiliate marketing, is hard to measure. The current system – click through rates – does not translate into sales. But of course, with traditional advertising, clients can voice the same concerns.

The bottom line is the Internet needs to be part of your advertising mix, as does social media. If you are not there – you’ll miss a lot of potential customers.

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