Online advertising is no longer the experimental outlet it once was: in fact, 80% of businesses market online. By 2006, 90% of businesses are expected to apportion part of their ad budgets to online media. This year, online ad spends are anticipated to increase 19 percent – six to eight times what TV, radio and print are expected to increase. (Outsell, Inc., "Annual Ad Spending Study: Where and Why Advertisers are Moving Online," January 2006).

Surprised? It seems that while TV, radio and print still claim the majority of budgets, it won’t be that way for long. Although, it’s not as if traditional advertising mediums will vanish, but the tide has shifted: the Internet is where consumers research, hang out, and receive influential information.

The key targeting mechanism is still of course, search. Search spending will continue to grow at least 25% this year because it works. New research from WebSideStory confirms that search engines (paid and organic listings) provide more than twice the conversion rates of other online advertising methods.

Chuck Richard, vice president and lead analyst for Outsell, said in an interview with the Boston Globe, "Advertisers could care less about the media as long as it works. They have a budget and they want to reach people. But these are seismic changes in terms of traditional media being able to maintain their growth rates. Most of the traditional media are public companies under tremendous pressure to increase growth year after year."

Indeed, it is difficult to compete against searches growth rate. U.S. searches grew 55 percent in December 2005 over December 2004, exceeding 5 billion searches at the end of 2005 (Nielsen//NetRatings). The user base is growing slightly yet it’s the more active online audience that is causing the increase in searches.

Despite its rapid growth, there remains an education curve before online budgets increase exponentially. Offline marketers still have misconceptions about the longer-than-anticipated sales cycle search requires. They still think of search marketing as a quick return-on-investment, and are quick to discard search campaigns when they don’t meet expectations. Yet, they’ll knowingly extend print, TV and radio campaigns without quantifiable or short-term results.

The key is to continue to allocate more dollars to search and online advertising because your audience is online. And, they are increasingly spending more time there and are more influenced by ads and other consumers in the online world. Don’t get overly anxious for immediate return – search and online advertising are the newest but most product marketing medium. They are here to stay so get comfortable with them – learn as much as you can about the online arena so that you can anchor your business in its success.

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