In 2009 $155 Billion was spent on local advertising in the US. Yet only 7% of that figure was spent online. Market Trend projections predict that 50% of local advertising revenue will be spent online within the next 7 years. That means that $77 Billion will leave traditional advertising venues. Recent advances in online advertising such as online coupons will only serve to accelerate this trend.
You may have read the recent news stating that, "Groupon rejected Google’s $6 billion acquisition offer." According to Chicago Breaking Business and Bloomberg, Groupon decided that it was better off on its own.
What many people did not read was the fact that Google reported revenues of $6.77 billion in the first quarter of 2010, representing a 23% increase over first quarter 2009 revenues of $5.51 billion.
Why are local advertisers moving their advertising dollars online?
As Americans continue to become ever more connected, their reading, watching and buying habits are following suit. Conversely, more traditional advertising media, such as newspapers, direct mail and TV commercials, continue to decline in both popularity and profitability.
A recent report by Havard's Nieman Journalism Lab states that, At least technically, the recession is over, with GDP growth measured at 2.2 percent in Q3 of 2009 and widely forecast in Q4 to exceed that rate. But newspaper revenue has not followed suit, dropping 28 percent in Q3. McClatchy and the New York Times Company (which both came in at about that level in Q3) hinted recently that Q4 would be better, in the negative low-to-mid 20 percent range. This is not unexpected — in the last few recessions with actual GDP contraction (1990-91 and 2001), newspaper revenue remained in negative territory for at least two quarters after the GDP returned to growth. But the newspaper dip has been bigger each time, and the current slide started (without precedent) a year and a half before the recession did, with a cumulative revenue loss of nearly 50 percent.
The same statistics hold true for Yellow Page advertising. A recent quote from industry analyst Simba Information recounted the fact that, "Overall U.S. yellow pages revenue declined 11.8% in 2010. The industry’s revenue slide continued in 2010 as a recessionary economy endured and the transition from print to digital products continued. This marks another year of continuous; multiyear double digit loses in revenue from the major publishers. The industry growth rate has been declining steadily since 2004 and finished 2010 at $13.57 billion, or an 11.8% decline over that period. The outlook for 2011 is similarly negative, but at a slower rate."
Online Ads Break Out of the Box
With 72% of all mobile users in the US using text messaging, mobile marketing is also experiencing an upswing. motomessage.com reported that "Mobile marketing ad spending will continue to explode in the next 5 years. In 2011, eMarketer predicts spending of text message marketing, mobile banners, video and other mobile based media to crack the One Billion dollar mark. Growth from 2009 to 2010 almost doubled at 79% with next year predicting another huge increase of 48%. Text marketing based advertising is expected to top 2010 in spending with $327 million."
How You Can Reap the Advantages of this Growing Marketplace
Let's face it, online marketing is here to stay. And with good reason. Unlike many other forms of advertising, online marketing is completely quantifiable. With today's low cost and in some cases no cost marketing and analysis solutions, every business owner needs to fully exploit the advantages that online marketing presents.
Be it cost-per-click campaigns, social networking, blogging, online coupons, Craigslist and viral video marketing, the Internet is the only medium on the planet that can attract, engage and more importantly track every eyeball, click and sale that are involved in promoting a business. Add to it the fact that many businesses can also sell their goods and services online to create an additional revenue stream that far exceeds the confines of their local neighborhood and the Internet fully utilized can help any business survive these tough economic times.
Having worked with companies for more than 16 years with their online marketing, all I can say is that if you are looking for a way to expand your market, create more revenue and take your business to the next level, the statistics speak for themselves.
Carl Weiss is president of Access-JAX.com an online marketing company based in Jacksonville, Florida. http://access-jax.com