While the percentage of new internet users and online buyers may now be increasing at a relatively slow rate, the increase in the number of literate young adults and the spread of broadband access has lead to massive rises in online sales. Internet advertising allows for more specific targeting of prospective customers based on their online usage and search activities, as well as a series of different advertising delivery methods. The advance of online-advertising technology has also enabled marketers to see better how their ads are resulting in sales, which is something advertising with traditional media channels find problematic.
The past couple of years have seen several significant defections from the traditional advertising outlets such as Unilever, who chose to treble their online ad spending, and Visa who cancelled their SuperBowl promotions last year in favour of increased online activity. This trend by large advertisers is supported by Denise Garcia, Internet research analyst with WR Hambrecht + Co, who stated that:
"Procter & Gamble, large auto manufacturers and other companies have said they are decreasing spending on traditional media, like television, in favor of online media."
The Australian brewing company Fosters is the latest major television advertiser to make the shift online in an attempt to capture the internet market, with paid ad placements and a series of internet only humorous video commercials designed to target sites popular with young adult males. SABMiller who own the Fosters brand feel that the beer is perfect for online promotion and has changed the $5million US TV advertising spend over to experiment with online adverts. Ammo marketing director, Gary Stein, said, "$5 million isn't a huge amount of money, but it will probably go a lot further online." As this is only one of the brands owned by SABMiller, it is possible that if this proves a successful experiment, more spending will be channeled online for advertising products such as Miller Genuine Draft, although competitor activity may force the maintenance of a continued TV presence.
As technological changes continue to lead to the creation of new means of online social interaction, the number of targets for marketers is also growing. The escalation of the social networking phenomenon led by MySpace which, while still trying to find its feet financially, is managing to provide another market outlet to be tapped by online savvy companies. It is estimated that despite being untried territory, $280 million will be spent on advertising and marketing on social network sites in the US alone with an additional $70million in international markets during 2006.
Where new technology may lead marketing in the future is unsure, however what is certain is that there appears to be a boom time ahead for online advertising and companies willing to take on this brave new world.
