Online marketing showing signs of “maturity”

by Tony Fannin, CEO/Partner, BE Branded  |

New media may be showing signs of maturity (in the business sense). It’s not that it’s losing money, but it the 400-600% increase of revenues are harder to come by. Many have built their model on selling advertising. The trap that the online world presents is there is really no end to creating inventory, but there are less and less buyers of that inventory. Couple that with falling ROI on everything from SEO to PPC and you get a maturing industry. Again, it’s not that it isn’t working, but to expect the huge amounts of leads, sales, or what ever your metric is important to you, is no longer a realistic expectation.

Many online sites are starting to look for a revenue model beyond “free”. They have been hugely successful in getting a user base of millions, but many still struggle in how to make money beyond just selling advertising. This is where the over abundance of inventory starts taking it’s toll. It is also getting more expensive to run these sites since now they are having to pay for content that once was free or cheap. Just take a look at Google. YouTube, who hasn’t been profitable since it’s inception, just inked a deal with Viacom to “rent” programing and content. YouTube realizes that quality content still matters. Yes, the amateur videos are fun and sometimes go “viral”, but people are returning to quality, like they always have. Once the newness wears off, users start demanding quality. This is part of what is forcing Google’s hand in having YouTube pay for content (something they resisted doing since the beginning). Google is also showing signs of their Cost-per-click business model starting to slow down. They reported an 8% decrease in prices paid by advertisers in the 4th quarter. This is after a decline in the 3rd quarter of last year. This resulted in profits falling very short of Wall Street expectations.

What does this mean? Maybe, the online world is starting to be judged just like other types of marketing vehicles. Up till now, many marketers gave new media a “pass” when it comes to accountability. Just marketing online was good enough. Also, many marketers are realizing that arbitrage returns are not realistic in the long run, that it’s no longer cheap or free and taking a DIY approach isn’t really as effective as some hoped it would be. As in all excellent marketing, not everyone can do it themselves, otherwise, there would be no need for marketing and advertising agencies. Effectiveness still comes down to core marketing principles, delivering brand experiences, appropriate messaging, appropriate channels, etc. Social media is currently in the “honeymoon” phase where no one really expects as much accountability as they place on other types of marketing such as direct mail and TV spots.

One thing that is slowing down both new media and social media is what does the data really mean in terms of true business and real revenue? So what if you get 10,000 “likes” or your video goes “viral”? Do you know how that translates into actual revenue? So what if you are the talk of the online world for a few weeks, does that PR hit sustain your business over the next year or two? Often, the answer to these questions is, it helps, but it’s nothing to build a sustainable brand on.

So keep experimenting and learning how to use new media and social media effectively or engage with an agency who can handle that for you and teach you at the same time, but start to understand that all things mature and goes through their life cycle. Start holding your digital marketing to the same standards you do the other parts of your marketing and you won’t be caught off guard when the industry reaches maturity.


About Be Branded

Tony Fannin is of President of BE Branded, an integrated marketing firm who helps clients BE Somebody to their customers. If you aren't somebody, then you are commodity.

No comments yet... Be the first to leave a reply!

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: