An article on the NY Times website this morning reported that the amount of money companies are spending on online advertising has been dipping in recent months. The article said worldwide spending on Internet advertising shrank by 5 percent in the second quarter of the year to $13.9 billion from 14.7 billion. This marks the second consecutive quarter of the year that internet ad revenues have dropped over the previous year’s quarter, which is creating all sorts of pressure on firms like Yahoo and AOL. The article went on to state that money spent on online display advertising in particular dropped 12 percent compared with the same quarter a year ago. Search advertising was the least affected, dropping only 3 percent, the company said, while “Google alone defied gravity, increasing its American search revenues by 3 percent in the period”. That’s a compliment when a NY Times says your company defies gravity.
This article is significant for two reasons. First, a downturn in internet advertising is something that should cause some worry amongst these online companies. While industries like print, and cable advertising fade into the past, online advertising was expected to be at the forefront of the industry. Instead, even the web is being affected by the global recession, and the fact that companies are just spending less money. While they still might decide to advertise on with companies like Yahoo, they will be doing more research and trying to attain a bigger ROI before plunging their brand blindly onto a website.
Secondly, the fact that Google “defies gravity” is plain nuts. Google has successfully entrenched itself as the WORLD’S go to spot for information. Google has no boundaries, and brings people useless and useful pieces on knowledge in a matter of nano seconds. Because of this cornucopia of information, and the extremely low learning curve of using Google (step one: type your question, step two: hit enter) Google is able to buck the downward spirals of its competitors. Search Engine Optimization is supplanting traditional advertising, and is continuing to evolve with the marketing world. People look to the vast world of Google when they need something, which creates a demand to companies to vie for that coveted “top of the page” spot when potential customers type in something related to any aspect of life. This constant flow of customer’s eyes combined with Google’s innate ability to adapt and move forward is the secret jet fuel behind its ascent against the gravity of the recession.
As of right now… it looks like they have a lot left in the tank.
Joe Carretta
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