Open for Business

Wednesday, May 04, 2005

Thoughts on the advertising business

My blog (more often than not focused on Open Source) is certainly not the best place to learn about advertising. This said, I read an article on Internet Week that provides some interesting numbers and trends and I thought I would share my $.02 hoping to get your reactions as well.

Marketers obviously try to reach consumers where they are. Today, according to Forrester who surveyed 99 of the nation's largest marketers, modern consumers spend about 1/3 of their time online, either at home or at work, which is roughly about the same amount of time they spend watching television. It is much easier to monitor and measure the impact of an email or an online campaign simply because you can easily get stats about consumers behavior (number of clicks, time spent on each page…).

In 2005 the online advertising and marketing business has reached $15B a whopping 23% increase over last year expected to reach $26B by 2010). That’s huge!

I gotta tell you I am not excited about the direct consequences of that on my personal “web life”. All of us will most likely get more spam; the content we read will be cluttered with ads. For now I am able to get around most of the ad junk by using good spam tools or very nice features that come with Firefox such as the wonderful AdBlock filter which is the second most popular Firefox extension. It looks like the majority of the surveyed marketers, feeling that TV advertising is becoming less effective, are going after blogs, RSS feeds and our mobile phones. Even though I don’t like it, I have to agree especially when people utilize TV like I do. I usually Tivo everything I am interested in and watch it later just so I can skip all the commercials. I can’t tell you how much I love Tivo! It makes me feel more efficient with my time I can watch a ton of content (news, documentaries, or games) in a very limited time. As a consequence marketers are now thinking about a static image that would be displayed as a poster on your TV while you’re skipping the commercial. They are also more creative using techniques like product placement in popular TV shows and blockbuster movies. We all remember the Minis racing in the Bourne Identity and I can’t count the number of times I saw Apple laptops in recent movies…

The article concludes that newspapers will have to either embrace the trend and buy popular online sites (like the recent acquisition by The New York Times Co.), or come up with content that online sites cannot provide such as local news and information on community events and activities. I don’t really buy the latter, there isn’t a thing a newspaper can do that a website cannot do. It’s just a different distribution channel it has nothing to do with content. Furthermore, Yahoo and Google have made their intentions very clear that the local market is of great interest to them. Beyond the news, they now have Google Local and Yahoo Local to find businesses and they integrate that nicely with maps and price comparison (like Froogle), etc.

What do you think? How can newspapers and traditional media players survive without the vital support from marketers?


  • Unless you are a shareholder or employee why would anyone care whether traditional media dies or not? What they return to society in exchange for the imposition on peoples time and attention is negative.
    Compare the usefulness of a Google to Gilligan's Island Reality show, not to mention that one service pays it own transmission cost and the other is subsidized via free usage of public spectrum.

    The sooner traditional media dies the better off we all are.

    By Blogger Bjorn Stadil, at 8:22 PM  

  • I am not a shareholder and I don't really care if we go paperless and all the newspaper go away or transition into the online world. I have never really been into reading the newspapers.

    I like your blunt opnion about it though :)

    Thanks for sharing your thoughts Bjorn.

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  • Advertising can be a big problem otherwise. A lot of companies reserve a big chunk of their budgets to cover marketing expenditures.

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