Monday, April 4, 2011

Two reports show online business still has lots of room for growth; B2B online display advertising budgets stagnant

Two recently released marketing research reports reveal that while online advertising is enjoying strong growth compared to print, print continues to get an overweighted amount advertising compared to the medium's actual readership levels.

Despite good growth projections, eMarketer says that while US adults spend a little over 25 percent of this media consumption day online, only a little less than 19 percent of ad spending is targeted to online. Mobile media is also underweighted: 15.6 percent of media consumption is via mobile media, while ad spending on mobile makes up only 11 percent of the marketing dollars.

Newspapers and magazines -- print, that is -- are overweighted, according to the report: 8.1 percent of time is spent reading a newspaper, while newspaper get 16.5 percent of the ad dollars out there.

This phenomenon is probably the result of traditional buying habits as agencies and marketers are slow to move ad dollars from one medium to another. The raw numbers also do not measure ad effectiveness.

Forrester released a report two weeks ago that also revealed that B2B interactive marketers are also not moving dollars to online at a rate equal to the rate readers are moving to online media. According to the report, while 71 percent of B2B marketers are advertising online (display ads), this is considerable less than the 86 percent of marketers that are targeting consumers online.

Partially this can be explained by the more complex and longer sales cycle associated with B2B, but it is also reflects the rather poor job B2B publishers have done in developing and promoting their online properties. Forrester, though, says marketers have their doubts about the effectiveness of B2B online display ads.

Not surprisingly then, few B2B marketers are planning on increases to their online budgets in 2011 - only 13 percent according to Forrester, though overall spending is expected to increase this year by over 6 percent. The emphasis was added to show that at least in the area of B2B marketers are not putting their dollars where the readers are heading.

I should add a note here, however: I have not read the report, which costs $499 on the Forrester website, so I am relying on second hand accounts of the report. Having said that, their own findings are consistent with my own experience talking to B2B brands and their agencies.