Online advertising budgets surpassed print for the first time in 2010.
Why?
Return on Investment (ROI).
Take a look at the studies from Direct Marketing Association (DMA) report on response rate in 2009.
- Email Marketing is the clear winner with a return on investment of $48.08.
- Internet Search comes in second with $21.90. This includes SEO and pay-per-click which make up 35% of the ad budget combined.
- Internet display ads (banner ads) or affiliate ad placement sees $19.57 return.
These online advertising numbers are nearly unheard of in the print and direct mail marketing industry. If they are even possible with print, they are not tracked in the way online mediums are.
Advertising is any form of communication that is passed on to an audience with the purpose of endorsing a product or service provided by an individual or organization. Egyptians used rolls of papyrus to send advertising message and even wall posters. The first instance of print advertisement was recorded in 1836 when the French newspaper La Presse published its first advertisement. The advertising industry has leaped across generations of changes and subsequently developed media like radio, television and magazines have become the major media of advertising. The turn of the century unleashed the internet in a big way and it is growing in leaps and bounds to such an extent that other media will not be able to compete with it. This has resulted in a huge shift from the print media and more and more companies are now spending money on online advertising.
The main reason for people moving a major chunk of their advertising budgets to the internet is the reach and speed of this medium. The organizations are able to contact a large number of prospective customers within a much shorter span of time. A newspaper has a life of less than a day and most magazines are thrown away within a week. They also have a limited circulation. However, the internet is available 24/7 to thousands and millions of people around the globe. The reach of the World Wide Web is huge and is increasing at a breathtaking speed.
The other concern is that the cost of print advertising works out to be higher as compared to online advertising. This is because you only have to pay when someone clicks on your advertisement or visits a website on which you have put up a banner. This saves money and allows the organizations to advertise effectively in different places and get more business. The bottom line is that to the ultimate goal of advertising is to generate revenue at a quicker pace and if money can be saved while advertising, it can be used elsewhere to get better results.
The biggest benefit of online advertising is that is extremely relevant. An advertisement in a magazine or a newspaper reaches each and every person who purchases it. These people may or may not be interested in your offering but you still have to pay as per the circulation. This is definitely a waste of money especially when you consider the situation on the internet. The types of people who see your advertisement on the web are usually those who are in some way or the other interested in your product. This is because you would place your ad only on relevant sites and for relevant searches. If you are selling a car, you can place you ad on the website of the most popular car magazine and tie up with the search engine to display your ad whenever a person searches the internet using the keyword “car”. This way you ensure your advertisement investment is directed at your target audience effectively.
Different options available to the customers are webcasts, SEO, email, social media, banners and videos. Hence, more and more organizations are waking up to the advantages of online advertising and are shifting their investment from the print media to the internet.
