Monday, May 19, 2008

What Recession? Online Giants rake in ad bucks

John Doyle
Internet Marketing
Kevin Trainor

There is a huge recession going on in this country today. The recession has affected many big businesses and how they market to the public. The question remains however, how is this affecting marketing on the internet? In the article the author states that “the internet is generally less expensive, more targeted, and easier to track than most traditional media and at a time when marketers are pinching pennies.” One source the author uses in explaining her case is from Marketing Sherpa. Marketing Sherpa is a blog website. On this website they conducted a survey that showed that “thirty-eight percent of marketers expect to increase their online ad spending during the economic downturn, a number only slightly higher than the thirty-six percent who expect to decrease their traditional media outlay.” The author goes on to explain that even though online marketers may seem better off during this time of recession, this may not be true overall. Online marketers may not be completely or equally insulated compared to their non-internet marketing counterparts.
Search engines like Google believe using their targeted direct response nature is the key to surviving the recession. Google’s senior VP of global business development realizes the slowdowns in the U.S. economy, but Google’s search business will continue to flourish internationally.
Chief Financial Officer Blake Jorgensen from Yahoo said, “Our diverse base of advertisers and industries has produced good overall growth and helps to offset cyclical weakness in different sectors.” He added “that even when advertisers’ budgets fall, the impact on the internet ad industry will be blunted because of its superior targeting and accountability.”
While the U.S. economy tries to emerge from recession, marketers are seeking all angles to cut back from wasted advertising dollars and in turn reach in-market consumers. This is keeping them from advertising elsewhere and forcing advertisements to a more direct target.
I saw a direct parallel between this article I just summarized and some of the things we talked about in class. In class today we discussed that one of the primary reasons for using the internet is the use of search engines. We also discussed how internet marketing is increasing because it is directly targeting users. In this article they also discussed two of the biggest internet search engines, Google and Yahoo, as well as how they are now targeting the users more with advertisements that track the user’s searches through cookies. I gained insight into how internet marketers are coping with the increasing recession and understand why companies are taking a more targeted direct approach.