"Buying increased after consumer confidence climbed in December to the highest level in six months, helped by rising stock prices and a better jobs picture. At the same time, Saks Inc. and other chains limited promotions and discounts, forcing shoppers to pay full price for popular items." Thus begins this post with a quote from a Bloomberg news article citing the 15% increase in 2010 online holiday sales. With hubris, upscale shopping sites even charged full price for their wares.
Having recently returned from the 2011 Affiliate Summit West in Las Vegas I can report that the mood was much more upbeat than in the recent past. My compatriots at various ad networks reported good prospects for new affiliates and an overall feeling that their will be big business in the year ahead.
The online advertising world seems to have recovered from the recession and is entering its very own recovery. And this is as it should be. The world is becoming more connected with more and more people getting online everyday. From computers to phones - the Internet keeps becoming more accessible.
I just received a new DVD player equipped with wireless and the ability to put You Tube and, most importantly, Netflix on my TV. Now I go to my queue and pick movies to come in the mail and movies to show up almost instantly on my TV screen. It's what I have always thought about whenever I went to my now defunct neighborhood Hollywood Video - instant whatever movie I want.
Online advertising will continue to grow and more and more companies will increase their ad spend. But in 2011, probably more so than any year to date, advertisers will be faced with an array of new technology allowing them to focus their ads to the perfect consumer, just as our government, made up by many who barely understand the online advertising world, begins to figure out how to regulate and lay down restrictions in the interest of their privacy.
The holiday spending may have been good, but unemployment remains high, which will continue to cause a drag on a real recovery in spending - "it would be a mistake to read much into the unexpected decline in the unemployment rate, which fell to 9.4% from 9.8% – the lowest it has been since May 2009 (when the economy was still technically in recession) and the sharpest one-month decline since April 1998. While some of this ‘decline’ did indeed reflect the rebound in Household employment, it was largely due to the sharp decline in the labor force participation rate, which tumbled to a 27-year low of 64.3% in December from 64.5% in each of the prior two months. The culprit: discouraged workers soared to a new record high of 1.32 million.”*
"More confirmation of a double dip for housing: The Case-Shiller Home Price Index registered a year-over-year drop of 1.6% in November. That’s the biggest 12-month decrease since December 2009, " states the 5 min Forecast.
Rising gasoline and food prices along with a declining dollar will prove to be a challenge for the consumer looking to hold onto his job and his house, especially coming off a year where Americans saw 2.9 million homes foreclosed.
Advertisers will need to be savvy in their buys. With the Post Office looking to cut back the days they work and to raise the cost of mailing, the marriage of online and offline marketing will certainly be rocky.
Thriving online marketers know though that inside every obstacle there are plenty of opportunities. Many of the brightest minds and entrepreneurs are working in the Internet advertising world. This will be a good year for business, but if you are an advertiser you will need to be savvy in your choices. As more and more consumers come online with dollars to spend it is important to realize that they are also consumers facing enormous pressures from diverse places.
http://www.bloomberg.com/news/2010-12-23/online-holiday-sales-climb-15-as-web-shoppers-buy-apparel-electronics.html
*Forecast 2011: Better than Muddle Through - from Thoughts From The Frontline by John Mauldin
The War on Small Business, Continued from The 5 Min. Forecast by Addison Wiggin 1/25/2011
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