With the economic recovery and the need for many businesses to rebound from the relative drought in advertising during 2009’s recession, digital advertising sales have taken off. We actually saw this in our own business as early as December of 2009, and to date there are no signs of a slowdown. New York City, one of the key media hubs of the world, recently posted the best employment outlook in nearly a year.
But how will digital advertising fare with the more recent uncertainties facing the economy, stock market, and the world at large? “There is still some uncertainty for consumers,” says Risa Goldberg, President of Media Recruiting Group. “It seems that when the stock market is on the rise, people feel good about spending and it helps the economy. When uncertainty returns to the financial markets, people tighten up pretty quickly. But advertisers seem intent on getting their message across in spite of these factors.”
Some economists fear a double-dip recession in the second half of 2010. I tend to agree with a different group of economists who simply see a growth slowdown the second half. And absent a large, significant event, digital advertising will remain in its own little “sweet spot” of continued growth, and demand for digital advertising sales professionals will stay strong.
Let’s look at some recent facts. According to MediaPost, most forecasters are predicting double-digit online ad gains in 2010. The IAB recently reported that online ad spending hit a higher-than-expected $5.9 billion in the first quarter, so research firms and Wall Street banks have revised their forecasts upward for the year.
This contrasted to US consumer magazine ad spending. Magazine companies will reap digital rewards from their online and mobile properties, but the print ad spending in US consumer magazines is set to decline again in 2010, 2011 and 2012 before finally rebounding in 2013 and 2014.
Among those who were adjusting their digital predictions upward was eMarketer, which increased its projection for the online ad market in 2010 from $23.6 billion to $25.1 billion, up 10.8% from 2009. But eMarketer does acknowledge fears that a double-dip recession sparked by the European Union debt crisis could end up dampening anticipated spending levels by both consumers and companies. “Much is still unknown, but it’s clear that a larger portion of total media ad spending will migrate to the Internet, even if overall ad spending remains stagnant,” states the report authored by analyst David Hallerman.
Social Media Marketing as a form of Advertising
EMarketer points out that money that once went to display is going to social media marketing, or “earned media,” which doesn’t show up in spending charts and is harder to trace. But with its surging audience, Facebook in the first quarter sold more display ad impressions than Yahoo for the first time. Its 176.3 billion impressions accounted for 16.2% of the U.S. total, followed by Yahoo’s 131.5 billion (12.1%) and Microsoft’s 60.2 billion (5.5%).
Some industry experts go as far as to say that “Social is the new search.” One might look at this as wishful thinking, but consider that USA Today‘s Web site gets more referrals from social networks than search, as does CNN.com (source: Compete, April 2010). Huffington Post gets slightly more referrals from Facebook than from Google.
Brands want to be where the consumer lives. A Nielsen study shows that 75% Of U.S. Households Use Social Networking, and Internet users spent an average of more than 6 hours a month on sites such as Facebook, MySpace, and Twitter during May. Did I hear “let’s reallocate some ad dollars!”? Small-business owners are finding results with social media marketing as well. They report that their work-related online activities correlate with above- or below-average sales, according to a study by American City Business Journals.
The power and appeal of social media is strong, and brands better be listening. The most trusted sources for consumers are friends and family. If brands believe that trust is central to their message and their marketing, then social networks must be part of the advertising/marketing plan.
Did You Know That:
- More than 40% of consumers go online to check reviews and consumer feedback before purchasing consumer electronics.
- 60% of those going online have visited a social network, with half going back every day according to Facebook.
- 23% of social network users expect companies to listen and respond to what is said online
So what is the bottom line as this relates to your sales or marketing career?
Last night at a board meeting, one of the Directors surprisingly showed up. He is a bankruptcy attorney and had not been to a board meeting in a year. I said to him, “this IS a good sign for the economy!”
The power of digital media sales and social marketing may waver slightly with a strong economic downturn, but on its present track it will continue to be sturdy and thrive for some time to come.
If you are already in digital media…stay there and continue to grow and learn. A commitment to a digital career is a commitment to a life-long learning process.
If you are not in digital media, get into it. Do side projects to gain the experience if you have to. Or, volunteer at a charitable organization to work on their digital media ad sales, website marketing, SEO, SEM, etc. Get in the game.