20 Jul

The future of Online advertising

It seems that recent NYTimes.com decision to offer paid content to subscribers has created a lot of buzz around the blogsphere. And even though, from the freedom-of-information-point-of-view, I dislike their decision, I wonder if this will help their business in the long run.

Considering the latest Forrester Research study about online advertising they shouldn’t worry in the next couple of years, and here are some excerpts from this study:

  • 2005 growth in online advertising spending, represents a 23 percent increase from 2004, up to $14.7 billion and it’s estimated to $26 billion by 2010
  • This is not the return of “The Bubble“?. The growth is coming from marketers having to make tough decisions about allocating scarce advertising dollars – in many cases, funding online channels from traditional channels. Back in 1999/2000, spending often came from exuberant spending, fueled by venture money.
  • It’s more than just about search. Search is great, it’s growing, but it’s not the whole story. In fact, I anticipate that search will become much more integrated into traditional brand advertising
  • Marketers will shift channels away from traditional channels to fund online marketing

On the other hand the more and more popular Firefox and Opera browsers (and who knows, maybe IE7.0 will do it to) are giving the users the opportunity to block most of the ads in the webpages they are visiting (and I’m thinking here about the popular AdBlock Firefox extension as well as the powerfull Greasemonkey scripts, and why not Opera’s new features on this).

As such, for advertisers to keep the trend, they have to find new ways of spending their dollars, the same way they moved beyond pop-up’s as soon as most of the browsers gave the users the chance to get rid of them. And it seems they are already considering alternatives, according to the study mentioned before, new advertising channels will draw interest and spending from marketers. Sixty-four percent of respondents are interested in advertising on blogs, 57 percent through RSS and 52 percent on mobile devices, including phones and PDAs.

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