More advertising dollars are going online

Online advertising grew more than 34 percent from 2005 to 2006, from $12.5 billion to $16.8 billion, according to Interactive Advertising Bureau and PricewaterhouseCoopers. That marks the third straight year of growth in excess of 30 percent, and the trend isn't stopping there.

EMarketer estimates online ad spending will reach $36.5 billion in 2011. Online advertising surpassed radio advertising in the first half of this year, according to TNS Media Intelligence and is expected to surpass newspaper advertising by 2011, according to a widely watched annual report published in August by Veronis Suhler Stevenson.

What's driving this? Online ad spending represents only 7.6 percent of the total advertising budget, yet most people spend much more of their time online, both at home and at work, than they do reading newspapers or magazines, and for many, more than they listen to the radio or watch TV.

Also, online advertising is much more measurable. The new technology makes it easy to determine just how many people respond to the ad, making it easier to compute a return on investment as compared to traditional ad media.

Advertisers are taking notice and moving their ad dollars away from newspapers, radio and TV and putting a bigger share online.

It's not just big businesses like Ford, GM, and Wal-Mart that are behind this. Small- to medium-sized businesses are also getting in on the act. One of the great things about the Internet is that the ad of a small business can show up right next to one from the mega-advertisers.

How can your business get in on this trend? Here are four alternatives for your online ads.

1. Pay-per-click campaigns (PPC) Advertisers can pay Internet publishers based on the number of clicks a specific ad gets. PPC is an easy tactic for SMB's to use to kick-start their online advertising results.

2. Banner ads Businesses can purchase banner ad space, and when a viewer clicks on a banner ad for your business, they are taken to a page on your Web site. Well-designed and targeted ads can increase brand awareness and bring targeted traffic to your site.

3. Paid inclusion Businesses can pay search engines like Google and Yahoo! to guarantee their Web sites are listed in search engine results for certain keyword search terms.

4. Online video advertising Online video advertising is predicted to be the fastest growing area of online display advertising, but according to a July 2006 study by Jupiter Research, its best years are yet to come - 2009 or 2011 - when the medium is more predictable and targeted. While not many small or medium businesses are embarking on online video advertising today, it is sure to be a popular approach in the near future.

Next month we'll cover in a bit more detail what you need to do before you start an online ad campaign.

Jonny Buroker is an Internet Marketing Consultant with WSI - We Simplify the Internet, serving south central and southwest Wisconsin.