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Study: Online Promo Spending To Surpass Search, Display

Spending on online promotions is set to triple from $8 billion in 2007 to a whopping $22 billion by 2012, surpassing both traditional banner and paid search advertising, according to new research. The study, conducted by Borrell Advertising, claims that online contests, giveaways, coupons, gift certificates and the like "are proliferating" because one, they engage consumers, and two, they forge a strong bond between the media company and the advertiser.

"Local media companies that are genuinely helping those businesses grow, rather than merely selling advertising to them, are well positioned to succeed in this brave new world of marketing," the report says. Advertisers also like that online promotions produce measurable results.

According to Borrell, online promo spending is just 22% of the $37 billion global online advertising pie. However, when you weigh all promos against global marketing spending, the sector accounts for about 60% of spending, the research firm said. Presumably, they're that it's only natural for online promos to grow to a similar market share. Meanwhile, the firm forecasts that both display and search spending will begin to decline in the next few years.

Read the whole story at Mediaweek »

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