The Rationale behind the Significant Growth in Online Advertising

To increase the businesses’ profitability and market shares, multinational companies were very much dependent over the use of the traditional marketing communication strategies in the past. Due to globalization and tight competition in the world market, it is necessary for modern marketing managers to study and focus on making businesses adopt to major changes in the trend of marketing communication.

Let’s face it! Globalization has triggered a significant change in the way people conduct business. Rather than focusing on domestic business transaction alone, businessmen today are being challenged to find ways on how to locate cheaper raw materials, labor, and services from other countries. Normally, the purchasing of cheaper materials and labor can be done by outsourcing. The same concept applies in sales and marketing. In line with this, the local businesses should expand their market by exporting their products and services to other countries.

In 1970s to 80s, businesses were heavily relying on the use of traditional advertising medium such as television ads, newspaper and magazine print ads, brochures and pamphlets, or radio advertisements. Since 2000s, the use of outdoor advertisements like billboards and other forms of media such as the Internet, mobile communication, and advergaming has been a significant part of marketing communication.

Although the use of traditional marketing tools can still be effective under certain circumstances, the use of pure traditional marketing medium is not advisable. People these days are very much pre-occupied with their busy lifestyle. Because of cable and internet technology, people have access to more than 500 TV and radio channels.

As soon as the television or radio ads had been released on air, the marketing campaign of products and services eventually stop. As a result, only a small portion of a company’s target audiences will be able to view the ads on TV or radio. This makes a lot of companies miss out a great deal of business opportunities. Likewise, the effectiveness of these marketing communication tools is also gradually losing its essence since a person can receive hundreds of print advertisements or direct mail each year.

Customized marketing is about using or integrating the available marketing communication medium to reach out for specific target audiences. Since the use of the digital technology or Internet advertising has already made an enormous percentage growth as of 2005, the major change in the patterns of marketing communication should be taken advantage of modern marketing managers. This is the rationale behind the significant growth in online advertising today.

In my next article, I will write about the advantages and disadvantages of CPC (pay per click or PPC) and blogging.