During the dotcom crash pundits all but wrote off online advertising as a fad whose time had come and gone.
But what the pundits didn’t foresee in 2001 was the rise of Pay-per-click (PPC) and cost-per-action (CPA) advertising models, which completely revolutionized the marketing and advertising world, by giving marketers exact measures of the success of their online advertising efforts.
Short Term Fallback or Long Term Change?
As recent market declines and recession continue to sweep world economies, some pundits are again predicting the downfall of online advertising. Even Google is forecasting lackluster advertising revenue growth for 2009 in the range of only 5 to 10 percent. And to be sure, I’ve seen click-through-rates (CTR) dip over the last year from 10 percent to less than 5 percent across our own content network.
But is this a short term pullback in overall marketing spend, which has decimated other advertising media including TV, Print, and Direct Mail, or a signal of long term change? Have users become “ad blind” even to contextual advertising such as Google Adwords just as they did to the banner ads of the 1990s? Or are they just not clicking as often on ads because they aren’t spending?
Probably the answer is that the combination of weak consumer confidence and the fact people have become more aware of contextual ads are signaling further transition in the long term strategies online advertisers will need to adopt as world economies begin to recover.
Convergence of Social Media and Online Marketing
With the phenomena of social media such as high profile blogs and a plethora of social media networks, marketers are finding that the key to success is to move beyond online advertising that relies on heavy-handed sales messages toward greater transparency, engaging prospects and customers in true conversations.
Companies and marketers that get this transition are already capitalizing on social media to build brand loyalty and increase market share. Those that don’t better figure it out soon.
The notion that influencers affect consumer sentiment toward brands and products is nothing new. But the means by which companies and their agencies get influencers on board has changed radically in recent years, with the advent of high profile bloggers and social media users.
Take for example, the 2008 holiday promotion IZEA developed for retailer Kmart. In this controversial case of social media marketing experimentation, Kmart offered up $500 gift certificates to 6 influential, high profile bloggers including Chris Brogan and Jeremy Schoemaker, who then reported what they experienced and bought in their respective spending sprees.
Marketers Learning to Give up Editorial Control
The trick here with the IZEA/Kmart campaign was that each of these influencers was allowed complete editorial/message control; Kmart was not necessarily recruiting spokespeople and had to recognize the possibility that the campaign might result in negative commentary. But then again, as the saying goes; “any press is good press”.
Marketers who decide to experiment with social media marketing will have to face the fact that editorial control lies with the influencers, who have built significant brands online and will not agree to simply “spam” their readership and risk harming the trust they have worked hard to build with followers!
Another recent example of the power of social media marketing was Panasonic’s invitation to Chris Brogan to attend the 2009 CES show in Las Vegas in January as a “guest”. Covering the event as an independent blogger (with disclaimer and complete transparency to his readership), Brogan used his blog and Twitter to provide real time updates of the show from his PDA and laughing about how he was posting updates as events occurred, whereas mainstream journalists’ posts would be delayed for hours or days!
I expect to see a LOT more major brands and agencies exploring these ideas even more creatively throughout 2009, pushing the envelope of social media marketing and moving away from the declining results of straight PPC advertising. In an era of declining TV viewership, online ad blindness and shifting consumer spending habits, the pace of change will only continue to accelerate.
If you have thoughts on the fate of online/social media marketing and advertising, go ahead; leave a comment and speak your mind!
February 11th, 2009 at 1:28 pm
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February 11th, 2009 at 6:56 pm
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March 1st, 2009 at 5:46 pm
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March 25th, 2009 at 6:08 pm
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