In the current economic context many companies -especially companies who have recently been formed – have slashed their marketing budgets. Obviously, this has had a knock on impact on the advertising sector with many medium such as TV and radio announcing record losses in the past year.
The decline of the advertising sector has been exacerbated by the rise of digital media. The IAB – Internet Advertising Bureau – announced this week, that for the first time ever recorded, online advertising spend is now higher in the digital sector than in TV. Indeed, the digital sector is the only area of advertising that has recorded any growth in 2009.
While an increase in online advertising spend is a trend we have been creeping towards for some time, many business analysts have suggested that it has be accelerated by the recession. Marketing Consultant, Kate Berg, comments: “Digital media has completely re-defined the advertising landscape and initiated a shift away from more traditional mediums such as TV and Radio. The acceleration of this trend is the result of a number of factors; increased consumer purchasing online, the rise of online discounting sites and the widespread access to high speed internet. However, it is the recession that accelerated it to its current position.”
“For the first time, business owners were offer an advertising medium which allowed them to see exactly where their money was being spent and the return it generated. Also, an online advertising campaign could be executed with a small budget compared to the massive rates charged for a TV or radio slot – even those offered at recessionary rates.”
Adam Learer , the founder of directhomewares.com told us that advertising on TV wasn’t even considered in the first ten years of his company’s incorporation, due to the cost. Instead, the only advertising they felt was commercially viable from the point of company formation was online.