Despite the serious world economic downturn that we are witnessing, online ad spending has just continued growing seemingly ignoring everything else. All indications are that this year (2012) is the year when online ad spending will zoom past print magazine and newspaper advertising for the first time in history.
It is estimated that advertisers will spend a staggering $39.5 billion (which is 23 per cent growth over the previous year) against newspaper and magazine’s 33.8 billion. And what is really interesting is the fact that online ad spending has not displayed any signs of slowing down or exhaustion and if anything looks like it is just getting started. Most projections show that this double digit growth will continue to grow for many years to come with US online ad spending expected to reach $52.8 billion in 2014 and $62 billion in 2016 according to eMarketer.
To understand exactly what is happening here it is imperative to look into the various factors that are responsiblefor driving this massive growth on online advertising. To start with it seems that nobody can argue against the massive growth in internet traffic that has been witnessedin recent years. Advertisers usually keep a very keen eye on volumes and look for numbers all the time. And so it should not really surprise anybody that they have quickly followed the crowds flocking in the direction of the web.
But an even bigger factor at play here has to be the super fast increase in the number of people accessing the World Wide Web through mobile devices like smart phones. This coupled with the fact that people are spending less time with traditional media and more time with their mobile devices on the go means that advertising rules have been re-written suddenly and dramatically in favor of the World Wide Web. Clearly it is becoming increasingly essential for a business to have a presence on the web that is easily accessible. Anything less will become an increasingly major handicap.
At the same time search engines have grown in popularity proving convenient to consumers who are hard pressed for time and need to find information quickly. Leading search engines like Google have a massive client base using their PPC (pay per click) ads (Adwords) that appear right next to the organic results. These ads have been mainly responsible for Google’s amazing profits and the reason for this is not too difficult to figure out. The ads are actually very effective in driving targeted traffic and they work. This has no doubt contributed a huge chunk to the consistent growth of online ad spending.
Then there is the phenomenal growth of social media, the two leaders here being Facebook and Twitter. People are even meeting spouses on these sites and clearly advertisers seem to have already taken notice and realized that the web has become the major social interaction and entertainment medium as well as being a reliable source of information. Its’ power and reach cannot simply be ignored.
Most experts agree that the web is only in its’ infancy and so the wild growth in online ad spending can only be expected to continue for a long time to come.