As if 2008 wasn’t bad enough for newspaper advertising, 2009 looks to be even more dismal. During the current financial crisis, businesses are looking for any ways they can find to cut corners and save money, and this includes reducing the size of their advertising budget. Advertising agencies have little to be hopeful about. The CEO of IPG’s Mediabrands, Nick Brien, told the Wall Street Journal, “I don’t see any growth for the industry next year [in 2009]. It will be scary. There are no Olympics, no election spending and the real impact of what happened on Wall Street will filter down.

Online Advertising Holds an Ever-Increasing Share of the Market

But does the same hold true for online advertising venues? Is Google, for example, feeling the crunch of the global financial crisis? Perhaps they are a bit; the phenomenal expected growth of a 26% increase in online ad spending by businesses has been downgraded to a mere 23% increase. But in an industry that seems to be hemorrhaging dollars (the newspaper industry, for example, is expected to lose four or five percent of its piece of the advertising dollar pie), any growth is excellent growth.

Businesses are expected to spend a whopping $25 billion in online advertising in 2009. By 2010, online advertising venues can expect to hold nearly 14% of the total advertising market share, meaning that it will come close to doubling its market share compared to 2007.

Why Advertising Online is Increasingly Popular

Why is online advertising an attractive option for businesses? Advertising online is extremely cost-effective and gives highly measurable results. For businesses looking for the highest possible return on investment, online advertising offers the ability to track exactly what result is coming from spending on online ads. Businesses can track who clicked on what ad, and from those click-throughs, they can tell who eventually bought the product and who did not. Such accurate reporting information is available only from online advertising.

Advertising in other arenas, such as through a newspaper, the television, or the radio, depends upon subjective reporting. A local store manager might be able to verify, for example, that sales increased after an advertisement went out in the weekly paper, or a multinational company might be able to say with some certainty that an international magazine ad campaign has led to increased revenue for the quarter. But can the sales manager say with absolute certainty which customer came from which specific magazine ad? Unless the customer has reported this information him or herself, it is nearly impossible to know the answer.

The same is not true for online advertising. Advertisers pay for each click on one of their ads, and the precise information is logged by the advertising service, such as Yahoo or Google. Armed with such information, advertisers can increase the effectiveness of their advertising, as they learn from real-time data which combination of words, pictures, and websites lead to higher sales.

Facts About Advertising on Blogs

The reason advertising on blogs is so effective is that it allows businesses to reach out to very specialized niches that match with the products they want to sell. Consider which would be more cost-effective: reaching 100 television viewers who may or may not be interested in a vitamin product, or reaching 100 blog readers who have visited a blog about health products? Clearly, the blog about health audience has a loyal, dedicated readership made up of exactly the types of people who buy vitamins.

Old-fashioned advertising is a bit like playing the old children’s birthday party game, “Pin the Tail on the Donkey.” Blind-folded and spun around several times, the advertiser is released into a confusing sea of media options, and must somehow successfully find customers by simply throwing their advertising dollars at the problem. Advertisers on blogs can target specific readerships, choose how much they wish to spend (online advertisers who pay by the click can choose to cap their payments each month after a certain dollar threshold has been reached), and track the exact results of what they spend.

Choosing the Right Blog to Advertise On

Even in the online world, it’s important to be selective. Working with companies such as Google and Yahoo allows them to be selective on behalf of the business. This has its benefits; for example, when working with Google AdSense, Google charges the advertiser a higher rate per click for popular, reputable sites and lower rates per click for sites that do not have as reputable a track record in terms of generating sales.

What about working with individual blogging sites? There are some blogging sites, that brings together hundreds (sometimes thousands) of bloggers together on a vast array of topics. The blog portals are becoming increasingly popular destinations for readers, who can visit just one blogging site for all of their news, hobby information, and blog surfing. Advertising with these kinds of blog portals guarantees a certain readership in whatever business topic the advertiser might be interested in targeting, from pet owners to bicycle enthusiasts, and everyone in between.

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