Online Ad Spending Slows Down

Companies are doing everything they can to survive during this difficult time. As a result, many of them are cutting expenses, staff and advertising budgets. Lately, it seems as though all advertising forecasts are heading in a downward direction. Carat has slashed its ad spending forecasts for 2009 and 2010, SNL Kagan is forecasting a grim outlook in 2009 for both radio and spot TV, and WPP's GroupM new research predicts that outlays in 2010 will decline even more than they will this year.

Additionally, eMarketer has revised its Internet ad spending projections estimating that advertisers will spend $24.5 billion online this year in the U.S. While eMarketer put out a forecast in November 2008 which was slightly lower, it’s important to note that the lowered estimate still represents an increase of 4.5% over 2008 spending. According to Adweek, “Marketers spend more on Internet ads, while they spend less on advertising placed in other media, such as newspapers, radio and magazines. These spending shifts predate the recession, but the current economic forces both reinforce the new advertising models and make them more permanent.”

If businesses are cutting back across the board, marketing and advertising included, this could be a very costly mistake. Marketing strategies are part of the company’s long-term plan. Marketing helps brands put their best face forward and are vital to a businesses survival. Additionally, it allows companies to remain visible, relevant and connected with their customers. Otherwise, customers might go to competitors instead. While customers might not be spending as much during a recession, they are still spending. As such, it would be more effective to spend marketing dollars more wisely and not less. Ultimately, this means companies need to explore new mediums and channels, incorporate social media, utilize Internet advertising and think creatively.

The Digital Landscape in Italy

If you have ever visited Italy, it is likely you will agree that people are more relaxed and not connected to the digital world and their mobile devices 24/7/365. Italians break for siesta, visit cafés for Internet access and stop for a shot of espresso on their way home from work. As such, it is quite different from the fast-paced, multitasking American way of life, which consists of eating lunch at your desk, emailing and talking on the phone at the same time and working until the wee hours of the night. But who is complaining?

Studying abroad my junior year of college in Florence, Italy gave me a taste of living in a city that was serene. I remember feeling out of place and strange when stores, banks and the post office would close for siesta. But after a few weeks, I was completely adjusted and got used to taking it slow. Coming back to the United States was a different story.

My journey to Italy began in 2001, which seems like ages ago. Since then, a lot has changed especially in the digital realm. While I was there, it was a daily chore to go to the local Internet Café to send email to friends and family back in America. Needless to say, all we did was email and leave to tour the beautiful city. Visiting websites such as MySpace, Facebook and Twitter were not daily routes and unheard of at the time.

Although I miss Italy very much and promised myself and my fiancé that we would go back, I have often wondered what has changed in terms of their technology and acceptance of social networking. That being said, when I came across Kara Swisher’s blog entry on All Things Digital I was engaged with the story, especially since she discussed the digital trends and the popular conference “Tutto Cambio, Cambiano Tutto?” That roughly translates into “Everything changes, but should everything change?”

Kara indicated that Internet penetration is much lower in Italy then elsewhere in Europe and television still dominates most media. She attended the conference in Italy and said the following: “’We’re 2,000 years old’ is something you hear a lot from people as an explanation for approaching everything, from social networking to iPhones to anything interactive, with some wariness. While most people here note that they like Facebook, pronounced ‘FAY-sa BOO-ka,’ hardly anyone sees the point of Web 2.0’s trend du jour, Twitter (‘TWEE-tur’).” While few people have heard it, those that have don’t use it.

What surprises me the most is how fast Americans have embraced these websites and social applications and have made them part of their daily lives, while Italians are moving at a leisurely pace. Even though I mentioned earlier that the Italian lifestyle is much slower, it seems like they would want to at least keep up with popular social networking sites, especially when other countries in Europe have adopted them. I am always amused when I hear that Italian designers define the fashion trends and style guides for the fall and spring seaons, but when it comes to other aspects they lag far behind.

For more information, check out Kara’s interview with several Italians at the conference:

“You’re on Facebook?!”

This is the question that my 21-year-old brother asked me when he found out that I was on Facebook. I asked him to be my “friend” and a few hours later I got the frantic phone call. I could tell by the tone of his voice that he was not pleased. I explained to him that I was introduced to the social network by a coworker and felt compelled to see what it was all about. Since I am in the advertising industry, I wanted to learn how brands were interacting with consumers, what the ads looked like and what possibilities were out there for other brands. I promised that I would not check out his pictures and not ask to be “friends” with any of his college buddies at Emory University. I lied. Checking out his pictures and learning about how he spends his weekends at the frat house and bars was truly entertaining. As his older and wiser sister, I felt it was important to tell him that the employed-folks, such as hiring managers and bosses also belong to these social networking sites and they’re out to find out information about prospective candidates. A person on an interview can tell one side of the story, but a profile on Facebook or MySpace can truly tell the other side of the story. That one piece of advice hit home with my brother. The next day all the pictures were off and a lovely, smiling, clean shaved face was the new profile picture. Needless to say, I was relieved.

Besides the “friending” aspect of Facebook, there is a long list of activities to participate in. Spending more time on the social network and reading about the new trends for the future enticed my appetite to get more involved. In a previous blog, I mentioned the various applications that Gillette has for their fan base. However, the reality is that there are many brands on Facebook and more people are getting hooked. Additionally, in Social Networks: Five Consumer Trends for 2009, a recent eMarketer report explains that the social networking audience is growing rapidly. According to the study, “In 2008, 79.5 million people, or 41% of the US Internet user population, visited social network sites at least once a month, an 11% increase from 2007. By 2013, an estimated 52% of Internet users will be regular social network visitors.”


While there is steady growth in the number of people getting hooked to these social networking sites, there has to be something in it for the brands. Are they actually making money? Are they satisfied with consumers just interacting with their brand? Do they think that consumers will try their product simply because they put a fun interactive game on Facebook?

I recently read an article in Ad Age Digital that answered some of my questions at best. I thought it was worth sharing since I am sure many people have similar questions. The article explains that Facebook’s strategy has been focused on growth at the expense of advertising. However, Facebook is testing new models to gauge consumer interaction.

I don’t know about other people, but I like going on the site to check out what my friends are up to. I stay within my own community of friends and love to read their updates and see new pictures of their family and children. To date, I have a Friendster account and a Facebook account. I am on the verge of cancelling my Friendster account and have no interest in signing up for a MySpace account. Ask me in a few months if my account status has changed.

Is Print dead?

But is it really? The answer may depend on who you ask. If you ask any account manager at People magazine, you might get a reassuring and positive answer that print is alive. However, media strategists and analysts beg to differ and insist that print is a dying medium. I am on the fence about this issue. Although I go on the Internet on a daily basis for information, I truly look forward to checking my mailbox on Friday to get my weekly issue of People magazine. A smile always comes to my face when I get it because it means that the work week is done. I can sit on my couch, forget my worries and catch up on my entertainment news. The same goes for me when it comes to high fashion magazines, such as Vogue. While both magazines have a robust website with various new articles on them, I still think there is something special and unique, even luxurious, about reading a big, high-end glossy magazine. A guilty pleasure you might ask? Whatever you want to call it works for me. I just don’t get the same feeling of excitement and relaxation when I read similar people-oriented or fashion-based articles on the Web. You just can’t curl up and relax with a computer screen and an internet-based article.

However, one benefit of the Web is speed. Since I am time-starved and busy with work and school, I turn to the Web for most of my daily news and other information such as advertising and media trends. Searching for news on the Internet is quick and easy and I get all the information with a few clicks of the mouse.

After reading an article by Jeff Jarvis, former print editor, now a consultant and blogger at BuzzMachine.com and John Griffin, President of the National Geographic Society's magazine group regarding the demise of print, I feel confident that the strong magazines will survive. I take the side of Griffin especially when he says “there is tremendous value in passionate, knowledgeable, talented editors who can assign stories and photographs with budgets to do them better and more authoritatively than any individual can. The reader of a magazine like National Geographic can depend on the information being accurate, coherent, concise, beautiful and created by the by most talented writers and photographers in the world. And readers may learn about something that they didn't know they were interested in.”

Spending quality time with engaging content and entertaining visuals truly makes for a luxurious experience that readers can’t recreate on the Internet.