Advertising Moves to the Digital Medium

By: Shay Rosen

If you're one of the countless thousands of soon to be college students considering advertising as a major, there's a good chance you could be working in the online medium post graduation. While traditional advertising venues are certainly still viable, online advertising has come into its own and is poised to become the single biggest market for advertising dollars spent in the very near future.

Online advertising has changed dramatically over the last several years and is evolving to provide a better return on investment for businesses who engage in it. Google recently announced the inclusion of cost-per-action advertising into their Adwords campaign structure. The new model is meant to eliminate the ROI uncertainty of "traditional" (by internet standards) pay-per-click advertising methods such as cost-per-impression and cost-per-click.

The newspaper industry's current woes provide an exceptional indicator of the popularity of online advertising. Newspapers are losing relevancy in an increasingly digital world, and the reduction in advertising dollars has forced many to consolidate or be sold to private investors. Tribune Co., which owns the Chicago Tribune, the Los Angeles Times, and eight other daily newspapers, accepted an 8 billion dollar buyout offer earlier this year from Sam Zell, a real estate tycoon. Between those two newspapers alone, staff cutbacks and buyouts may reach as high as 250 jobs.

As online advertising becomes more popular, the number of mainstream advertisers will grow. While this may not take away from the television and radio industries as it has from the newspaper industry, the economic effect of mass migration to the medium will bolster the expansion of an already exponentially growing internet.

Part of the internet's popularity comes from the free availability of resources. While that's unlikely to have an effect on advertisers, it may have an effect on the venues they advertise with. In order to gain internet traffic, sites have to have something to offer, be it content or otherwise. Revenues from advertisements are capable of financing production costs, but not on a grand scale required by print companies moving to the online arena. Since information from one site to another is only a click away, advertisers are more likely to focus their budgets on websites that cater to a more finite demographic.

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