Advertisement is a tool that is used by businesses to let the potential and existing customers know about the availability of their products or services. The success of a business is based on how well and efficient it can reach the desired customers (Anon Marketing 9). Marketing – in most cases – target a certain segment of the market that can buy its products. A given market segment always have customers who have certain characteristics.
The availability of those customers is of benefit in the plans of an advertisement program. They should be known and the advertisement made to fit them. There is no much difference between marketing and advertisement since the desired goals are the same; increasing awareness and consequently sales is the agenda for both. The Medium of advertisement always come at cost, whether they are direct costs or are indirect costs.
The direct costs come in form of the money that a company has to pay to the media through which its products will be advertised. This media may involve the print media and the electronic media. There is also advertising using the word of mouth whereby the marketer physically presents the goods that he offers to the potential customers. He may be paid for it or he is the business owner who may think of this service as part of his duties (indirect cost). The electronic media has been on the increase and as technology increases so does the advertisement and marketing.
In the last century, the world embarked on massive computerization and each country was having a program of computerization. With the development of the computers, there is the internet that was developed to meet the goal of making the world a global village. Almost each company (whether profit making or nonprofit making), countries embassies and local government are having a website that gives information (that is meant for public consumption) about the organization.
The individuals are not left behind, almost everybody, especially the youths, who are computer literate have an email address. There is the growth of social media that have been used as networking tools among the youth. Companies and other organizations are also subscribing as members to these networks. They are not limited to space and distance, as far as you have internet access you can as well contact the information that is found in this social net works. They include Face book and twitter among others. The mobile phone technology is also another innovation that the marketers are targeting (Palser 5).
The business world among others is one of the major sectors that benefited from this technological advancement. There are new ways of doing business. The young population is highly growing and has adopted the new technology with a lot of ease. One way of reaching this market must in one way or the other have to involve the computer world. Advertising and marketing are the traditional way that businesses have utilized in their effort to expand their market. When a product has been introduced to the market, then it follows that there must be ways that the target market segment have to be made aware.
The same is used when trying to expand the market of a product. These two methods only change the way that they are conducted, but have been there since the development of business (Robertson 67). They range from word of mouth, print media, and the radio advertisement and currently there is the internet advertising that is threatening the other old way of advertising. Online advertisement has led to the emergence of many companies that are using various user friendly programs to advertise their client’s goods and services. These developments are in the efforts to reach even more market.
However, the advantages that the advertising method has brought itself with are making it move in a fast way. Online marketing, also called I-marketing, E-marketing, web marketing, social engine marketing, refers to the use of the internet to create awareness and persuade people to buy the products that one is selling. There are different tools that are used in online marketing. They include search engine optimization, pay per click management services, online media buying and planning, social media optimization, and internet marketing consulting. These are user friendly methods that the customer can follow the links given to the desired end.
This paper analyses how online marketing has overtaken traditional marketing by market share in the last decade and an observation of whether online marketing will replace traditional marketing in the future.
To discuss the topic above I will analyze the above stated topic by looking into one main claim and to expound on it, I will use sub claims. On the other hand, the discussion will be derived from internet information searched about a certain area of discussion. The approach that I am going to take is that of comparing and contrasting the traditional marketing ways and the online ones. As my sub claims I will analyze the changes in the way of life that is giving online advertising the drive to forge ahead. There after I will give the situation on the ground and analyze and approximate the future of marketing and advertising.
Some of the Online Advertisement Methods
This is created from the angle of thinking that the customer knows what he want. In this marketing strategy, the user looks at what he thinks fits him. The work of the marketer or the advertiser is to ensure that when the customer is searching, he will see the products that he is selling. Some of these soft wares are Google and Yahoo search. There is the use of key words as the technology that is adapted here. What the customer will need to do is just type a word to search and he can get the required information. The customer can search for a relevant area and facilitate a personalized kind of marketing. The personalized means of marketing makes the customers feels at free will to control what he will consume.
Pay Per Click
Under this way of advertisement, it gives the customer a chance to select what he wants to get from the advertising media. After the customer has chosen the product that he wants, he is usually charged a certain amount or the use of the website. Though this is not common, it was advantageous to the advertising company; because it shares the cost of advertising with the customer the cost of advertising is thus reduced.
This is a way of advertising using the social media that have come with the introduction of the internet. They are places that people are more likely to enroll as members or subscribers to the various social networks. In the networks, there is the interaction of people as they embark on joining certain groups and movements that are available in the internet. They have enabled what is currently referred to as internet friends that people can share idea and give opinions. To target this service the marketers have enrolled as members to these groups and in the process get the attention of the other members.
If by any chance there is the sale made to an opinion leader in the social network, the message is easily distributed. By one member becoming persuaded, the message can spread over to other many groups. As this happens the products are building their brand name and thus in the near future, the benefits of a strong brand name will be enjoyed (Huffington 22).
Online Media Buying and Planning
This involves the use of internet, not only to create awareness but to offer a negotiation table for the product. This has been used more in the sale of cars. For example, by using Japan cars website customers all over the world can get a chance to view all the details that the vehicle he wants to buy has (Rafaeli 23). These include even seeing the inside feature that cannot be attained by the use of traditional advertising methods.
This reduces the expenses in two ways. The customer has the choice of variety by the click of a button; this reduces the hassle of going to the market looking for the commodity but can even do it at home. The cost in terms of time and money that he would have used in the shopping is saved. On the other hand, the marketer gets access to a wide range of the market; global market at minimal costs, the costs of displaying the commodity is far cheap compared to the traditional one. The trader does not need to make physical selling outlets or shops all over the world but all he needs is to display the goods over the internet.
The problems that are associated with managing a large workforce are thus reduced. The efficiency that comes with this advertising method also comes in place; this is because by the click of a button the required information will be gotten. The purchase have been effected the integration of the banking sector that have allowed payment for a far country to be made in another. This is through the use of international money transfer methods like the Western Union, the Pay pall gears and the use of Visa cards
The United States of America is the worlds largest advertiser and accounts for over 50% of the worlds budget in advertisement. In the year 2004, Japan was second.
According to Interactive Advertising Bureau [IAB] 2009, the revenue from internet advertisement rose to $23.4 Billion in 2008, 10.43% increase from the previous year’s record of $21.2 Billion. This is a clear show of how the business is large and growing by day. This increment took place even at the time the world was experiencing financial crisis. The rate is an alarming one and there is need to analyze the direction that it has taken.
There are some advantages that the advertising posses over the traditional ways of advertising and are giving the sector a competitive edge. It has been argued that the companies despite the hard economic time used this way because of the fact that in online advertising and marketing, there is a third dimension. The third dimension comes in the form of reviews that are put across by the people who have already used the company’s products.
If the reviews are good, then the possibility that an online customer is more likely to accept the products is high. This is from the psychological approach using the fact that human being tend to believe the opinion of others whether strangers or friends, especially when talking from experience. There was also the need to increase the sales of a country through enlarging the market size by the international world. The way to attain this agenda is the use of the internet as the tool of advertising. If the situation was to be done by the use of traditional way, then the costs that would have been involved would have made the global situation worse (Anon Advertising 2).
The advertising and marketing online gives an interactive environment that the target customer can be able to communicate with the website. This gives the user the advantage of airing his or her views. This was never possible in the old marketing and advertising models. As per the population that is there in the world today, a majority is enlightened and knows its rights. In the exercise of these rights, the people need the environment that does not dictate on what they are supposed to do, the way the traditional marketing and advertisement seemed to do. The two way system of communication is assisting in building a strong brand name and relationship marketing.
When a company product has a good brand name, it is to the advantage of the company since the brand becomes self advertising. There are three levels of interaction that online advertising have, they are; human to human interaction, this is when the online system allows for a one on one communication with the advertiser. This may be through a recorded talk or online chatting. This gives the customer the real feel of the company and consequently its products before he purchases the goods (Gibson 34). This is a strong way of building the brand name since even if the interacting customer won’t buy, the feeling he got can be remembered as probably spread.
The You tube software is one of those advertising method that you talk to the customer at his own will, opposite from the tradition one that it is the advertiser that dictates what the customer will listen and watch. Marketing involves a persuasive way of changing the mind of the people and thus if the customer is left at free will to choose what kind of material he will consume, the easier it is to convince that customer. The second interaction that online advertising give is human to machine interaction mode. The customer is in control of the information that he is going to access and through the navigational icons and keys, he can direct his interests. This acts to give the customer the feeling that he is in control. This is a psychological management tool, whereby the client is persuaded from the point that he feel in control.
Human to contents interaction is the other interactive way that online advertising and marketing give. Here the client is at his free time to get as much information as he would like to get, since in online marketing and advertisement, the advertising company is able to upload a lot of information about itself at a low cost. The cost involved in online advertising are very low considered to the traditional ones, thus a lot of information can be gotten.
The consumer of a certain product is thus able to make informed decisions on his purchases. All the above interactions are important in the company’s effort to get more and more customers as well as building the brand name. None of the interaction would be available in the traditional mode of marketing and advertising (Pasra 33). All companies have an aim of improving their revenue base,. There are two approaches to increasing the base; increasing the sales or reducing expenses.
As much as the online advertising and marketing pose the above advantages among others, there are some disadvantages that come with it. They include; the business feels isolated, this is because there is no direct interaction with the customers, this will make the business act as if it is working in isolation. There are some internet websites that are overloaded by information and the customer is not aware of the choice that he should make, this may make the customer prefer something that he can touch, most available in the traditional marketing methods for example using display and promotions (O’Neill 3).
Getting the true picture on the ground may be hard because the customers that are visiting the sites are not always genuine and they may give the wrong impression. Finally, the advertising way seems to lock out some people in the society.
These are the people who have no access to the internet services due to their level of education or the availability of the internet. Africa and the developing countries are the ones that are affected by this because the population there is not literate to the internet. Recent campaigns to introduce the products in Kenya market was targeted at ensuring that the primary school teachers are taught the computer technology. If the teachers are not yet computer literate, this can tell how the population in the country is ignorant to computers (Kornblum 6).
The Population and the World’s Literacy Level
In the world today, over 60% of the people are young and learned. This means that they are more likely to be in the know how on the use of the computers. On the other hand, the job places that we spend most of our time (almost all) adopt the use of the internet. You will get the entire office connected. These people have no time for the traditional ways of marketing, but can be accessed via the net.
The mobile phones are nowadays like a necessity to a person. Since it can access the internet, when advertising is made via the internet, it means that at any one time the customer will find it. For an effective marketing and advertising, the knowledge of the target customer is of great assistance. This means that the target area of marketing that the marketer should target is the one he is likely to get more target market. The youth especially spend more time on social networks than they spend on the traditional advertising channels like the television and the radio (O’Neill 2). The cost of calling is high considered with the cost of browsing and thus the young people have utilized this to network with the other friends.
What the marketers are doing is to create program that pop into a social net work and put a message across. The population is growing by day and the new born children are adapting computerization at an early age. This will assist in increasing the customers that are targeted by the online marketing. The population of the youth has been reached by the use of various methods that are likely to attract their attention especially when in the internet. Among them is the use of celebrities (actors, musician’s athletes and other celebrities) as a persuasive tool (Crabtree 78).
The Situation in the United Kingdom
The United Kingdom is not left behind in the wave of change to online advertisement. This has been happening for a period of time (Kornblum 55). The statistics of the marketing and advertising showed that the trend has overtaken the traditional ways. The following pie chart shows the percentages of advertising expenditure which is a representative of the share of the advertising;
United States Situation
The following data is an analysis of the sectors and how they have embraced internet marketing and advertisement. One sector will be of benefit to another and the trend can be said to be contagious. The diagram is as a result of a survey done in the month of January 2008 by Nielsen Online in the United States of America
|Nielsen Online, Ad Relevance|
|US, Home and Work|
|Month of January 2008|
|Online Ad Spending by Industry|
|Industry||Estimated Spending||Share of Spending|
|Retail Goods & Services||$121,089,600||15.1%|
|Consumer Goods||$ 43,508,300||5.4%|
|Hardware & Electronics||$ 32,655,400||4.1%|
|Public Services||$ 28,770,800||3.6%|
|Business to Business||$ 13,423,900||1.7%|
Advertising Association 2010.
From the above table it is clear that there are interlocking sectors of the economy that have seen their way to advertise online.
The Current Situation and the Expected Future
There are many advantages that come with online marketing and advertisement; in the hard economic times and the opening of regional and international trade, many businesses will be forced to invest in online marketing. There will be more and more companies willing to advertise over the net. One of the remedy that have been proposed, to try and fight global financial crisis, is enhancing the international trade (Goldberg 55).
This trade will be enhanced at low costs if online marketing is embraced by both the trader and the customer. The education level that the world is continuously undertaking will also be another boost. The growing population of the youth who are finding the world with the technology in place is more likely to adopt it. Despite the growing need and the advantages that come with the mode of advertising, there is the population that the mode of advertising cannot cater for at any one time (Guetze 23). These are the illiterate people and are equally important for trade. The way the businesses are likely to conduct their marketing ways is to adopt a blended system.
This is the system that will accommodate the traditional ways and alas has the internet advertising. This will ensure that the entire population is covered, despite the differences that may be there. The future for online advertising is bright though. The electronic media is loosing business but there is a recent trend that the media is adopting, they are making themselves available over the internet. You can listen to the radio or watch television. Another way that the internet services have been used is in ticket booking by various air transport service provider. It is a way that has seen that full evolution in many countries and the traditional ways have been put away within many companies.
Online advertisement is not seen only in business but have assisted even in other spheres of life, a good example is in politics where the politician have used the tool, especially social networks, to carry on with their campaigning plan (Lasika 78). In 2008, President Barrack Obama used this tool as a campaigning method. The same was repeated in 2010, United Kingdom campaigns. The reason why they are using the internet for this is because of the low cost that is associated with it and the persuasive approach that they have. A message is spread with ease.
There is a wave to online advertisement and almost each businessman is trying to position him or herself to the changing business environment. The cost involved as well as the efficiency that comes with the mode of advertising is the attracting force.
The opposing force is from the negative side of online advertising they include the uncertainty by both the customers and the marketers on the true situation of the market. Another way that is opposing the full brown of the new model is the percentage of those populations who do have an access to the internet due to either the literacy level or the availability of internet services. This has led the two ways to be adopted hand in hand. You will find a certain company advertising its products to those people that are within its reach and those that are far enough to be profitable, with the traditional way.
Those markets that are far away are the ones that are reached through internet advertising. The population that we are having is also another boost to online marketing. The population has a growing knowledge of the internet and is more accessible using the internet. The trend of the people is expected to grow since computerization is like culture that is transmitted from one generation to another. There are some sectors that have fully embraced technology and this online advertisement has taken effect almost the full phase. The future generation is expected to adopt the use of online marketing and advertisement although elements and some traditional modes of advertising and marketing will still be there.
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