Internet marketing analysts are finding more reasons to be cheerful. Presentations at yesterday’s CPL Summit in New York supported the recent theme that conditions for a second half surge are starting to take shape.
The summit, sponsored by Pontiflex, focused on differing approaches to pay-for-performance advertising. Growth in PPC, search, and pay-per-lead are part of the reasons the second half of 2009 could be brighter than many projections that were revised downward over the past few weeks. Imran Khan, Managing Director, J.P. Morgan, singled out three more reasons for cautious optimism:
General recovery: Khan told the conference that the bank believes that second half of the year will be marked by stability in the auto market, the housing market and financial services. Stimulus spending will also at least start a modest recovery. This, he says, will loosen up consumer purse strings and lead to a general advertising recovery.
Continued Fragmentation: When advertisers do spend more money it should flow to the internet. This has long been a favorite prognostication of analysts, but Khan said the rise of social media and the complete collapse of newspapers make the case more urgent. “Newspapers have not changed their business model to adapt to changes in consumer behavior,” said Khan. “They made some business decisions that went wrong.” In doing so they have put a 35 billion ad market at risk. With social media’s explosion bringing the internet to the number one media consumption activity the numbers make too much sense to ignore. Newspapers still get 20 percent of the ad market, although they only garner 8 percent of time spent. The internet gets 38 percent of consumer time and only 8 percent of the dollars.
Ecommerce: High-profile multichannel bankruptcies are helping ecommerce, according to Khan. As ecommerce keeps its growth pace on a fast track, internet audience numbers will continue to grow, and ecommerce retailers will need to increase their display ad budgets and search optimization budgets. Even with a 15 percent growth rate for 2008, ecommerce still has room to grow. Only 4 percent of total retail sales are online.
While social media is adding to the time spent online, don’t expect a general migration of brand advertising migration toward it. Khan says brands “want assurance or the content of the quality they’re placed next to. They don’t want to be seen with dancing cats on You Tube.”