{{ searchResult.published_at | date:'d MMMM yyyy' }}

Loading ...
Loading ...

Enter a search term such as “mobile analytics” or browse our content using the filters above.

No_results

That’s not only a poor Scrabble score but we also couldn’t find any results matching “”.
Check your spelling or try broadening your search.

Logo_distressed

Sorry about this, there is a problem with our search at the moment.
Please try again later.

Question: what percentage of global ad spend goes to internet ads?

Answer: about 10%.

That obviously means that 90% of global ad spend is still going elsewhere despite the incredible amount of money that has been shifted (and will continue to be shifted) to the internet. Now hold that thought for a moment.

Yesterday, I read an interesting interview with Jim Rogers, a well-known investor. When asked what fund managers who were battered by the recent collapse of the major financial markets should do, he provided an interesting response:

Become a farmer. The world has tens of thousands of hotshot fund managers right now. If I am correct, the financial community is not going to be a great place to be in for the next 30 years. We have many periods in history when financial people were in charge, we had many periods when people who produced real goods were in charge — miners, farmers, etc.

The world, in my view, is changing and is shifting away from the financial types to producers of real goods, and this is going to last for several decades as it always has. This may sound strange but it always happens this way. Ten years from now, it may be farmers who will drive the Lamborghinis and the stock brokers will drive tractors or taxis at best.

These words provide a memorable reminder that there's a whole world out there that, for most of us, typically goes unseen. Most of us don't really think about where our food comes from and we also don't really think about how our iPhones and netbooks get manufactured. Yet each process encompasses massive industries that not only involve large amounts of money, but that are extremely innovative and full of opportunity. From the raw materials to the assembly lines to the supply chains, there's a lot that goes into producing almost everything we enjoy.

So what's the point of this?

It's easy to get locked into a particular mindset that focuses our attention too narrowly. Let's apply this to the fact that the internet only accounts for 10% of global ad spend. Lately, I've been asking myself a simple question: with all the talk about how offline and brick-and-mortar businesses (eg. newspapers) need to adapt to the internet, is there any reason that internet-based businesses shouldn't look to adapt to the offline world as well? Why does it have to be a one-way street? Is the world we live in not more accurately described as a multi-channel world?

If you run an online business that's growing like a weed, has great margins and a great reputation with clients/customers, should you sit back and relax because everything is gravy? Or should you consider that you may be ignoring an opportunity to leverage your position online to do even more offline. To make sure you're not leaving 90% of your potential on the table.

I'm not suggesting you go out and purchase a farm. That's probably a really bad idea (at least wait until I buy mine) but I think it's worth considering that while the internet can often be the foundation of a business, it doesn't have to be the end all and be all of a business.

You can look at the woes of the newspapers and say 'Gosh. Those dummies just didn't see it coming.' But there are plenty of online businesses guilty of the same myopia. Don't be one of them.

Photo credit: Jim Epler via Flickr.

Patricio Robles

Published 4 June, 2009 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

2393 more posts from this author

Comments (4)

Avatar-blank-50x50

Steve Fair

The periods of time when farmers and miners were "in charge" were a symptom of a lack of supply (caused by inefficient methods on the part of the farmers and miners) twinned with growing demand. Significant chunks of the service industries now facilitate better supply methods. With a growing population, a greed for gadgets, a need to feed and clothe the poor of the world and the Huxley-esque obsession with replacing stuff, the need to continue improving the efficiency behind the supply of "real goods" is every bit as important as their actual manufacture or in the case of farming, production.

about 7 years ago

Felicity King-Evans

Felicity King-Evans, Copywriter at HappyCopy

Interesting article.

I would like to know what proportion of advertising takes place online. It is a considerably cheaper platform than many others and so perhaps this figure is a little misleading because it makes it appear to be less popular.

/mytwocents

Felicity

Journalist and SEO copywriter

about 7 years ago

Patricio Robles

Patricio Robles, Tech Reporter at Econsultancy

Steve,

There's a point to be made about efficiency. If farmers in developing countries, for instance, had access to the same technologies and advanced techniques that we enjoy in the developed world, there would be a lot more food to go around.

That said, I think we overestimate the importance of the 'service industries'. Despite all of our advantages today, the food supply is still very tight and localized shortages are common. There are plenty of things that are in short supply in many areas, from fertilizer to certain kinds of equipment. Water and energy are always an issue.

We don't just need more efficient farms, we need more farms.

The bottom line is that a very small fraction of the world population is involved in the production of the necessities that the vast majority of the population consumes in some form, from food to raw materials. Our best and brightest are often convinced that these industries are marginal. Instead of focusing on solving key challenges in our most important industries, they're lured into believing that their skills are best applied to financial alchemy, corporate consulting and in some cases novelty internet startups.

More talent should be invested where it counts but a big challenge to that is that our best and brightest don't have any exposure to these things. You can't build a better fly trap if you have never tried to catch flies.

Food for thought (pun intended).

about 7 years ago

Avatar-blank-50x50

Manny Coulon, Director at IdeasForTheKids.com

Interesting article. I fully agree that the basics, and particulary food production, always have and always will be important. Maybe even more so these days if the world's population and resource usage continues to grow unsustainably.

I disagree though that the financial sector will languish for 30 years. The big difference now to past major world slumps is the vast amount money that there is to invest, driven in large part by increases in wealth of many , many people and more importantly pension funds. A generation ago, such investments were a fraction of what they are today, but now represent truly unimaginable sums that need to find suitable investments in order to generate returns and pay pensions.

I am sure that this demand will drive a recovery in the financial sector...though of course whether they do a good job is another matter altogether. Will they be driven by short term greed or long term, sustainable strategies?...

about 7 years ago

Comment
No-profile-pic
Save or Cancel
Daily_pulse_signup_wide

Enjoying this article?

Get more just like this, delivered to your inbox.

Keep up to date with the latest analysis, inspiration and learning from the Econsultancy blog with our free Daily Pulse newsletter. Each weekday, you ll receive a hand-picked digest of the latest and greatest articles, as well as snippets of new market data, best practice guides and trends research.