As noted by Andy Beal earlier today there appears to be some unnecessary alarmism regarding the current state on online ad spends. I say unnecessary because as we have noted on another occasion the media really has a twisted sense of when the sky is falling. According to the Wall Street Journal today there is actually cause for celebration from the 2nd quarter numbers for Internet advertising rose 20%. So what’s your take? Should we panic and go back to smoke signals or just struggle through a sluggish 20% growth cycle?
I can’t take this anymore! What I liked most about the WSJ take on this news was where advertisers were focusing their spend. This was actually valuable because it appears that while we fly ahead towards Web x.0 (insert your favorite version) people who like to advertise to other people who like to buy their products are spending more on – GASP! – text ads in search engines. It’s on track for $10.4 billion this year. This is double what will be spent on display ads and the gap is widening.
As an example take Creditcards.com which is referred to as typical. They spent $30 million on online marketing last year. By the way, since I usually work with the SMB (small medium business) market a $30 million spend is not typical at all but I digress. Some of that budget last year was used to experiment with buying display ads and now this year that experiment will be halted and those dollars redirected to – you guessed it – search ads. Apparently the ROI on the display ads didn’t cut it.
With more than 70% of the US search-ad market, Google is smiling bigger than ever. This news comes on the tail of their Chrome browser beta this week. World domination is just around the corner apparently. The article continues with a lot of spin from the likes of Yahoo!, AOL and Microsoft to say that display advertising is not suffering like it seems because (insert lame PR excuse here).
The part that was distressing to me going back to point earlier about the small business search marketer is that there is an apparent cutting back in this segment around number of keywords being purchased. I personally just see that as small business folks not wanting to waste money on poorly converting terms while letting the big boys spend as freely as ever. One man’s opinion. John Aiken of Majestic Research notes that more ads are showing up for some keywords and suggests that Google is “potentially stretching for dollars”. Google’s response was that in many cases it just has more ads to show because of the volume.
It’s up to us as internet marketers to cut through this stuff and do the next right thing. Just continue doing search marketing because it works. What a novel idea, huh?