I realize it's a bit of a "duh" headline. As most of us know, marketing budgets are typically the first to get cut when it comes to any sort of economic difficulties in the country or within an industry.
The Wall Street Journal reported today that spending on new media will be slowing...this is significant in that it was a market poised for significant growth. Many companies were starting to jump into the fray and experimenting on advertising on networks like Facebook and MySpace, mobile programs (integrated texting into larger campaigns for example) or even spending marketing dollars advertising in video games.
Ad executives say creating an entirely new form of advertising to put in untested places like virtual worlds â€" or three-dimensional online computer games â€" may not be worth the effort in tough advertising times...
Spending figures for emerging advertising remain small compared with spending in the overall online ad market, which reached $21.1 billion in the U.S. in 2007, according to eMarketer. U.S. advertisers spent $878 million dollars last year on mobile marketing, which includes ads delivered through text messages or displayed on a mobile Web site, eMarketer says. U.S. ad spending on widgets and applications â€" small computer programs that can contain videos, interactive games and music that Web surfers can post to blogs, social-networking or personal Web sites â€" was $15 million.
When budgets start to tighten up, companies aren't going to be as willing to spend money on technologies that are somewhat unproven. Note though, that this article is referring to advertising in conjunction with new media.
What the article doesn't talk about is how social media can be helpful for companies who have to tighten their belts. USING social media is often free â€" so if companies have a strategy for listening to or becoming part of the discussion vs. advertising then those tactics may prove productive when advertising dollars fall short. I'm talking about stepping up the pace in using blogs, Twitter, Facebook or LinkedIn groups, networking sites, forums, etc. Start and participate in the larger conversation to promote yourself, your company and your products. After all, it's been proven over and over that Word of Mouth is one of the most powerful tools in a marketer's arsenal and social media technologies are made to do just that...facilitate conversation.
That's not to say that participating in social media conversations is entirely free. There is a price â€" that of time. It takes time to determine your strategy and time to execute and participate. Still, I imagine that the lack of budget needed for these types of campaigns could prove enticing to many executives.
The tricky part of this equation is the loss of the advertising dollars in those new media networks.
A cutback is likely to spell tough times ahead for the slew of companies offering virtual worlds, social networking, mobile-ad networks, and other digital media that have cropped up in recent years. Many of these companies raised significant capital based on their potential to tap into the fast-growing online ad market.
Now THAT is another story altogether. Anyone working for a social media company that is starting to feel the pinch already?
Full story here or WSJ subscribers can read here.
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