Online advertising will continue to expand in the coming recession – just not as quickly as previously expected, according to a report.
Online advertising is attractive to advertisers as it is making obsolete the distinction between above-the-line and below-the-line marketing spend by delivering the benefits of both, said
The Economist in a report on internet advertising in the US.
Above-the-line spending traditionally drives brand awareness or consideration, while below-the-line attempts to increase the consumer’s preference for or loyalty towards a brand.
Online video and ads on social networks are also cited by the report as two areas to look out for in the future.
Although one of the largest online video sites, YouTube, has yet to truly crack the monetisation problem – despite showing five billion video clips a month – the report says that ads on Hulu, a joint venture between NBC Universal and News Corp, appear to be selling well.
While Hulu only shows professionally produced content, the majority of videos on YouTube are user-generated, which can make some brands wary of putting their ads next to them in case they are offensive or boring.
Social networks also provide opportunities for advertisers, as users spend a lot of time on them. At the recent MediaTel Group seminar on the ‘Future of Online’, Trevor Johnson, planning and strategy, EMEA at Facebook, revealed that visitors to the site are spending an average of 28 minutes a day on it.
Two years ago 11% of time spent online was at Yahoo! and MSN, two web portals, said The Economist, now their share is down to 5%, and 5% of online time is spent at YouTube and Facebook.
Online research firm eMarketer recently revised down its projection for US online ad growth, putting online ad spending at $25.7 billion in 2009 – 8.9% over the $23.6 billion that will be spent in 2008 (see eMarketer revises down US online ad growth).
At the end of October, Yahoo!’s ad exchange company, Right Media, found that UK online advertisers are moving from traditional leaderboard banners to Mid Page Units (MPUs) and other new formats (see UK Online Advertisers Moving To New Ad Formats).
The research found that MPU’s were the most popular online ad format in the UK during the first half of 2008.
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