Internet Advertising Grows As Traditional Outlets Suffer
Advertising dollars are increasingly shifting to direct response marketing -
especially using the Internet, according to a new research report.
Internet advertising reached nearly $9 billion in the first nine months of
last year, up 22.5 percent from that period a year earlier, and increased
another 15 percent in the fourth quarter thanks largely to holiday shopping.
Within a decade Internet ad spending is expected to account for 15 percent
of all advertising spending, up from 6 percent last year.
On the other hand, spending on newspaper advertising sank 2.7 percent in the
first nine months of last year compared to the same period the previous
year, and ad spending on network TV fell 2.5 percent over roughly the same
period.
At a December 2005 conference, a leading forecaster projected that Internet
ad spending will surge 22 percent in 2006, while newspaper ad revenue will
rise a sluggish 3 percent.
And a new report by the New York-based Winterberry Group has documented a
shift from so-called above-the-line (ATL) marketing to below-the-line (BTL)
marketing.
ATL marketing channels includes television, radio, print advertising,
outdoor advertising and yellow pages.
BTL channels are targeted direct marketing efforts, including direct mail,
interactive marketing, insert media and promotional marketing, according to
the trade publication DM (Direct Marketing) News.
BTL channels are projected to average 7.8 percent growth between 2003 and
2007, while ATL advertising increases by an average of 5.5 percent annually,
according to the report.
Based on its research, Winterberry Group listed several trends encouraging
the shift to BTL marketing, including:
- Changing demographics reduce the importance of traditional mass media
- "One-size-fits-all" marketing
- Increased availability of information facilitates precise customer targeting and intelligent purchasing decisions.
- The report noted that the Internet in particular has been siphoning advertising dollars from more traditional venues such as television and newspapers.
Clearly the Internet is radically transforming advertising because it allows
advertisers to target specific readers that fit their demographic profile.
Another advantage of the web is its ability to easily allow customers to
make immediate purchases - without calling toll free numbers or sending back
cumbersome snail mail envelopes with check payments.
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