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Posted by Shar VanBoskirk on October 6, 2006
I’ve gotten a number of press calls since Yahoo announced it has missed its earnings on October 5 asking if I think this indicates a larger slow down of interactive marketing spending overall. My response to these qualms “No way, Jose.” Here is what I think is happening:
*Interactive marketing spending is definitely different today than it was in the boom times of Bubble One (circa 1999-2000). But this is a good thing. Today, more traditional marketers are including online advertising, email and search marketing in their marketing mix. This provides stability and legitimacy to interactive media which it did not have when it was supported solely by dot coms.
*Perspectives toward interactive are more mature. Another difference is that marketers have had 7years to watch how internet marketing works for them and for competitors. So now, they can spend appropriately for their goals, as opposed to blindly hurling fortunes at new channels. This means, we see steady increases in interactive budgets because of channel effectiveness, rather than dramatic blind bursts of spend in untested media.
*Marketers have a lot of interactive options to choose from. I think perhaps the biggest realization Yahoo! came to this year is that marketers have many, many alternative places to spend their interactive dollars instead of on banner ads on portal sites. For example, marketers today can build MySpace pages, buy product placements in video games, create RSS feeds, or buy mobile search ads, to drive desired behavior among their target customers. I think Yahoo!’s ad sales slid because marketers where diversifying how they spend their budgets across online alternative.
Of course Yahoo!, MSN and Google all see this diversification of ad spend and are taking different approaches to how to take advantage of it. Google – ever the technology company – is trying to extend its search tools into other online properties and offline media. MSN continues to acquire other companies to create a multi-channel set of media properties. And Yahoo! is bringing new user features and communities into its existing portal. I think there is still room for all three, and the primary differentiator as interactive marketing continues to grow will be which one can provide the easiest way for advertisers to manage a single buy which includes all of the online (and offline too, eventually) channels they want to utilize.