Cut Through the Clutter to Win

The online advertising market is huge — and growing fast. Already topping $5 billion, the market is projected by Jupiter Communications, New York, to reach $16.5 billion by 2005.

It doesn’t take a rocket scientist to figure out what market factors are driving this explosive growth. The bloom has come off the rose of traditional advertising. The same companies that mere months ago were spending millions on radio and television are now turning their attention — and shrinking marketing dollars — to Internet advertising and its promise of quantifiable results.

But as online advertising revenues rise, so does the danger of alienating potential customers with advertising clutter. Online advertisers — especially small and medium-sized businesses — need to avoid the clutter trap by focusing on the unique targeting capabilities that online advertising offers.

Changing market conditions have taken their toll on advertising budgets.

Gone are the days of wild spending on television, radio and print. Businesses of all sizes are searching for more efficient and more accountable ways to market their products and services.

The lure of online advertising, with its low costs and high returns, is irresistible. Online advertising spending is rising faster than any other medium. Seventy-three percent of all advertisers will increase their online advertising spending in the next 12 months; only 43 percent plan to do the same with print; and even fewer — 37 percent — will increase their spending on television.

With online ad spending growing at an annual compound rate of 30 percent, Internet advertising will account for a whopping 8 percent of the entire advertising market by 2005.

Prosperity, however, does have side effects. All this new spending on Internet advertising will affect the most important participant in the advertising game: the customer.

Today’s consumers are already inundated with up to 5,000 marketing messages a day. While only 440 of these messages arrive in the form of online banners, Jupiter projects the number to more than double in the next five years.

These numbers pose a real danger for online advertisers and publishers.

Clutter, the bane of advertising, is coming to the Internet. The same battles for space and attention that characterize advertising in other media are now appearing online, making it increasingly difficult for advertisers to see the cost-effective, quantifiable results that attracted them to the Internet in the first place.

Getting lost in the online advertising scramble are the SMBs that rely on the Internet to reach existing and potential customers. Online advertising, with its cost effectiveness, ease of use and self-service options, has always been ideally suited for SMBs. But now that these traits are attracting an even larger pool of advertisers, the “little guy” is finding it increasingly difficult to break though the corresponding clutter.

If SMBs are to continue to get their marketing messages in front of the right people at the right time, they need to focus on two of online advertising’s other tangible benefits, namely the ability to target their audience and track the efficacy of their advertising efforts.

To avoid the clutter chaos, SMBs need to renew their commitment to creating extremely customized and targeted messages that address a relevant audience with a relevant message. The online marketplace is constantly changing, but its targeting and tracking capabilities still make it the best channel through which SMBs can achieve their marketing objectives.

Online advertising allows SMBs to cater to reach their vertical, focused audiences using demographic and behavioral criteria. Customers can also be targeted by geography, which is of particular value to SMBs with a local focus.

Speed and agility have never been more vital to an SMB’s advertising success. Online advertising remains the best medium for SMBs desiring immediate feedback on their advertising campaigns. Only the Internet allows advertisers to measure ad performance by cost per thousand, cost per click, or cost per action/acquisition.

SMBs stand to gain a great deal in the battle for online exposure. Despite a surge in growth and clutter, online advertising remains the most cost-effective way for SMBs to effectively target even their most hard-to-reach customers. With wireless advertising looming, SMBs will soon have an even more effective means of reaching their segmented audience online.

It won’t be easy, but SMBs that commit to a more careful and diversified approach to online tactics and advertising models will hold their own in the battle for a powerful online presence. And the online advertising market can remain a place where everyone has equal access to the market — and an equal chance for success.

• Albert Lopez is founder/CEO of AdFlight, Belmont, CA. Reach him at [email protected]

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