Tom O’Keefe

I received a great comment yesterday in response to my article, Google Adsense & the Economic Turmoil, from Rick Breslin of Drive Thru Interactive.  Rick is the President of Drive Thru Interactive, web site design for small business, and the developer of Bizak.

In my article I speculate that the current economic downtown will slash marketing budgets which will trickle down through Google Adwords and Adsense. According to Rick, and an article in eMarketer, marketing budgets will likely be cut but online advertising will still thrive because online marketing is more “measurable and accountable” than print advertising.  

According to Rick Breslin:

While I agree that advertising/marketing budgets will get cut within large corporations, this is actually the best time for small businesses to continue their marketing efforts. Never stop marketing. Ever.

In fact, we’re seeing businesses (both big and small) trimming their advertising spend with traditional media (especially newspapers and magazines), while keeping or increasing their online advertising/marketing spend. Why? Online marketing is entirely measurable (and typically produces quicker ROI), and you don’t have to lock-in to huge advertising contracts with old-school publishers.

Additional email conversations with Rick expressed his belief that “online ad spend is decreasing with display ads and increasing with search (Adwords)” and 

…taking into account that Internet TV companies like Revision3 (who just had layoffs / cancelled shows) are adjusting because they make revenue from ads placed within their videos (early adopter stuff). That money is shifting to tried & true online advertising avenues like search, since they’ve figured it out over the past 5 years or so (PPC, that is).

Of course there is speculation on both sides of the online advertising spending debate but a lot of recent research supports Rick’s stance.  A survey in October 2008 by MarketingProfs found that 60% of 600 US marketers expected to increase their online spending in response to current market conditions. In June, McKinsey & Company surveyed 340 senior marketing executives, of the 91% who currently advertise online 50% of them expect to “maintain or exceed current levels” (eMarketer). The most interesting feedback from the McKinsey survey is that 55% of the senior executives are cutting traditional media expenditures in favor of online advertising.

The eMarketer article makes 7 points on why they remain bullish on online advertising spending. The number 1 point being that online advertising is measurable and accountable. With online analytics an advertiser can track every click and every sale that comes from their advertisement – print advertising can’t provide this type of tracking. Unlike traditional media (newspapers, magazines, TV) the Internet is interactive allowing for instantaneous feedback and engagement from consumers – feedback that can tweak the ad for increased effectiveness. Blogs, Facebook & Twitter can help spread these advertisements like wildfire and at virtually no cost to the advertiser – much more effective (and trackable) than handing a magazine to a friend.

All of these points by Rick and eMarketer increase my  optimism about online advertising spending. I still believe it’s time for a new advertising platform, but at least all of those Web 2.0 sites can still generate some income from Google Adsense until that platform is developed.