Two recent trends evidence the importance of targeted Internet advertising–more money going toward Internet ads, and fewer people that click on display banner ads.
First, the good news is that Internet advertising is rebounding (or at least seeing a reversal in the the decline of ad $). Tough economic times has decreased ad dollars among all marketing mediums. But online ads will be the first to see new demand from marketers. And some online companies are weathering the bad economy just fine. Google’s ad revenue rose 7 percent in the third quarter.
Compare with McClatchy (the U.S.’s 3rd largest newspaper company), where according to the AP article print advertising plunged 32 percent in the third quarter, but its online ad sales increased 3 percent.
So ad dollars are increasing. Where will money be spent? On targeted ads.
comScore released a study earlier this month that showed most people don’t click on display advertisements. As someone who never does either, I don’t find this surprising. According to comScore:
“The act of clicking on a display ad is experiencing rapid attrition in the current digital marketplace,” said Linda Anderson, comScore VP of marketing solutions and author of the study. “Today, marketers who attempt to optimize their advertising campaigns solely around the click are assigning no value to the 84 percent of Internet users who don’t click on an ad.”
This is huge. Online companies rely on advertisements to pay the bills and will need to better target ads to their users if they want to stay in business.
If we want to see the next generation of online content and services, then we need to stay vigilant to convince members of Congress (Boucher) and the FTC not to impose more restrictions on interest-based advertising, such as opt-in requirements.