Online advertisers focus on SEO
Advertisers are focusing on improving search rankings rather than spending big on display ads, new research has shown.
Online advertising budgets are falling as companies focus on search engine optimisation instead of display ads, according to new research.
A study carried out by Jefferies and Company shows that the weakening British and US economies are causing companies to reassess their advertising budgets.
The investment bank has revised its estimates for growth in the global online advertising industry, cutting $2 billion (£1.1 billion) off its previous prediction for 2008.
Jefferies and Company now believes that global online advertising will grow 20 per cent to $50 billion (£28 billion) in 2008.
It has also changed its projection for 2009 to $58 billion (£32.5 billion), down from $61 billion (£34.1 billion).
The percentage of growth within the online display advertising market is estimated at 14 per cent in 2008 and just seven per cent in 2009, according to the report.
By contrast, growth in search advertising will remain healthy at 26 per cent in 2008 and 23 per cent in 2009.
“More and more advertisers are allocating a greater level of their budgets to more performance-orientated channels, particularly search, and away from brand-building formats such as display and sponsorships,” said Jefferies media analyst Brian Shipman.
Jefferies is the latest company to revise its online advertising estimates, after eMarketer and Carat both lowered their projections in August.
Living Streams comment: There is no one solution that fits all and no optimum strategy for an individual company that will remain so for long. Brand awareness and reputation is still important for most businesses. Balance, measurement and continuous review are essential to retain or improve the overall return from advertising and marketing spends.