Internet Ads To Grow in 2004

As reported by the Center for Media Research, “in 2004 the U.S. economy should exhibit solid sustainable economic growth”. Moreover, the national advertisers have increased their internet budgets by 15%, following only cable TV and equal to syndication TV, in terms of growth rate. This is the story told by the big advertisers. Small business have a different story to tell…

The biggest national advertisers’ outlook for 2004 predicts 10% growth for internet advertisements to a total of $6,176,000,000. Thus spoke big business.

So, what is the story small businesses tell.

Only a couple of weeks earlier, the Center for Media Research claimed that, Small Business Depends on Yellow Pages and Newspapers, quoting eMarketer. As summarized by The Kelsey Group the estimate is that “small to medium-size enterprises (SMEs) will spend $22 billion on advertising this year, with 46% going to yellow pages advertising. A sizeable portion of SME media spending this year should go towards Web sites.”

This more than healthy growth of yellow pages advertising is an indication of the importance of geosearching — searching for information based on physical location. In a globalized world we are still very dependant on the local services small business provide in convenient proximity! This should make very intriguing the future developments in geosearching.

Back to the numbers published by eMarketer:
Advertising Spending By Small Business, 2003 (% of total spending)

Yellow pages 46%
Newspaper 13%
Web site 11%
Direct mail 6%
Magazines 6%
Radio 4%
Search engine keywords 3%
Print coupons 2%
Outdoor advertising 2%
Web banners 1%
Email marketing 1%
Other 5%
Source: Kelsey Group October 2003

While it is obvious that the low click-through rate of web banners would dictate less and less spend on web banners, how to explain the discrepancy between the budget for web site advertisement vs. search engine keywords? It either means that small and medium size businesses are distributing the advertising of their web sites over variety of media (i.e. web, magazines, yellow pages), or they hope that having a web site is enough to bring qualified traffick. Now that is a scary though… But that is why we need to educate web site owners — if you build it, they won’t necessarily come.