It is a fact that Internet advertising is growing while advertising across many print mediums is declining - especially in newspapers. So let’s try and bring some perspective to what is happening and then relate it to advertising in the human capital marketplace.
- Total U.S. advertising spending rose 5.2 percent in Q1 2006.
- Internet advertising jumped 19 percent in Q1 2006.
- Advertising spending in local newspapers dropped 6 percent in the Q1 2006 (the biggest decline for the publishing industry since 2001 and we are in a strong economy!). Underscoring this trend was a report from Borrell Associates stating that local businesses spent nearly $5 billion on Internet advertising in 2005 - a 78% jump over the previous year.
- Advertising spending on local TV stations declined in 2005 as viewership shifts to the Internet.
In the seven-year period from 1949 to 1956, television's penetration of U.S. households reached 72% (35 million sets). By comparison, Internet's penetration of U.S. households during the seven year period from 1997 (when the masses began to have access to the World Wide Web) to 2004 reached 75% (204 million people).
By 1969, 20 years after network TV debuted, penetration was at 97%. My guess is that by 2017 (20 years after the masses first had access to the World Wide Web) the Internet's penetration will also be around 97%.
What is different, however, is that seven years after network TV arrived, it already had 12% of the total advertising market share. By comparison, the Internet had under 3%. Today, online advertising is at $12.5 billion, roughly 5% of total ad spending in the USA. So while penetration rates are similar, ad spending is not.
History provides some interesting examples of how one new medium impacts advertising spent on existing mediums. In the 1940s, radios were in more than 80% of American's homes and received most of the advertising dollars along with "general interest" magazines like Life Magazine and The Saturday Evening Post. Network television (first launched in 1949) took advertisers away from radio and brought an end to the general interest magazines. But while network TV certainly dealt a serious blow to radio, magazine and other print advertising dollars, it did not wipe them out. Radio adjusted by focusing on local and regional advertising sales and magazines adjusted by developing special-interest (niche) magazines. All three mediums do just fine today and our guess is that while online advertising will continue to grow, it will not wipe out any print mediums.
All these trends can be filed into the Interesting-But-Who-Cares box if you do not make your living off publishing, radio or television. But if you are in marketing, they couldn't be more important because they provide insights into how you should be allocating your marketing dollars. Hint: a lot more of your marketing budget should be spent on getting your brand onto the Internet.
But "getting your brand onto the Internet" and in front of your buyers does not mean you have to be spending a lot of money on Internet advertising. And to me, this is what makes the Internet so fascinating from a marketing perspective (and how the fact that only 5% of total US ad dollars spent on Internet understates the Internet's marketing value). The three most fascinating things about the Internet (from a marketing perspective) are:
How does all of this impact marketers of HR products and services? You should be spending a lot of time and money on getting your message on the Internet because for the time being, it is the most cost-effective way to reach your buyers and drive qualified leads.
- You don't have to "buy" advertising space or rely on a journalist to place your message onto the Internet like you do for other mediums like TV, radio and newspapers/magazines. With effective SEO, blogging and sending marketing press releases you can achieve high visibility, drive traffic to your web site and capture qualified leads - all without spending a nickel on advertising. In fact, research shows that organic search results drive better leads than pay-per-click.
- Unlike other mediums, we use the Internet all the time. This is especially true in the B2B space which we compete in. Most of check email all day at the office as well as before and after work from home - or while we travel! To think of it in different terms, postal mail is delivered once per day whereas Internet mail is continuous, 24/7, non-stop.
- The Internet is interactive so you can easily capture valuable information directly from your buyers (e.g., asking them to complete a short survey or form in order to download a white paper) which helps you qualify the "leads" and fine tune your messaging.