Big Question for Advertising in Recession: Where Will People Look for Distractions?

Lately I’ve been feeling pretty depressed every time I had to drive around the city here in Novosibirsk for one simple reason: watching totally empty billboards everywhere constantly reminds me of recession wherever I go. No, I don’t want to say there are no outdoors ads here – it’s a pretty large city with almost two million of people and quite obviously we have plenty of companies who want to sell their products or services to these consumers.

But unfortunately since people don’t seem to be particularly willing to consume – even those who still have money to spend, simply because they feel safer keeping the money to themselves just in case they are get hit by the crisis as well – companies are equally unwilling to spend money pushing their products to the eyes of potential consumers everywhere. So it is no surprise to see almost half of all billboards totally empty here – though it is still very depressing.

I’ve been thinking about it quite a lot lately but today this issue got covered in the evening local news so I realized that it is important not only to me as a publisher whose income partly depends on advertising revenue but to many more people who have to watch blank spots instead of ads we have grown to expect on the streets of our cities and towns. I’m not sure how it is where you live but I suspect it must be pretty similar (or at least will be similar when existing contracts expire) everywhere since the recession has already hit many countries around the world.

But even if companies cut their advertising budgets (with outdoors advertising being the example that is very visible here by now), they will still have to reach their potential customers in some way. The explanation about the outdoors ads is that during a recession people spend more time at home instead of walking or driving along the streets: those who are out of their jobs simply stay at home looking for a new job and only going out for an occasional job interview while those who still have their jobs spend more time in the office not to lose what they have and also they spend less money on entertainment activities like movies or restaurants – and stay longer hours at home.

So the big question now is where exactly people will find their new distractions instead of those usual entertainment activities. It’s quite obvious that there are not so many things to do at home and you basically choose between TV, online entertainment and maybe some magazines as well (for those who still have money to buy them).

Why does it matter where advertisers will want to spend their reduced marketing budgets – online or on TV? To me it’s quite obvious: as a web publisher I partly depend on the money I earn off ads that accompany the content here on Profy and it is important for me to understand if my hopes that more advertisers will arrive online looking for new customers and additional exposure for more reasonable money will actually be a reality.

Of course it is a well-known fact that advertising on TV is very expensive and is also more difficult to evaluate in terms of its ROI. To the contrary, internet advertising is less expensive and is supposed to be easier to understand in terms of evaluating its efficiency as there are various technologies enabling the advertiser to see how people interact with his ad on what sites. This is why we keep talking about new advertisers who will eventually arrive to the world wide web trying to reach internet users with their messages – and bringing their money from traditional media outlets to us, thus helping some web publishers to survive the recession.

Yet while the issues like cost efficiency are important, it is definitely not less important to remember that you should only target your customers where they are. Quite obviously, you won’t be advertising feminine things like jewelry or cosmetics on a geeky website about gadgets – instead you will obviously go to some more feminine destination.

Quite similarly if you know that your target audience spends most of time watching TV and only occasionally goes online to do a quick search for some information or to check new emails you will hardly want to spend whatever portion of your already tight advertising budget online – no matter how easy it will be for you to measure ROI for the money spent online.

Of course it is quite easy to keep repeating our arguments about all the advantages new advertisers will find online when they switch to the web from TV or paper publications but how true are they? Unfortunately I have not seen much progress with online ads for now but I’ve already seen rates diminishing and ad-supported companies laying people off and looking for additional revenue sources to compensate for losses in advertising. I have always been the one claiming online advertising will be a healthy industry in the recession but unfortunately the deeper we get into the recession, the more obvious it is that we don’t see anything particularly healthy about this industry – same as we don’t see anything healthy about many other industries.

So it is quite obvious that tight marketing budgets make companies act wisely and evaluate consequences of all their actions in every step that they take. And of course it is a must to understand where exactly they will find their potential customers. And if these customers spend their days watching TV shows looking for some distraction from the cruel reality of the world financial crisis then advertisers will have to go on TV – even with smaller budgets and less advertising minutes to buy. So where do you think people will be looking for distractions and entertainment now and where advertisers will be targeting them?

Photo by Rich Anderson on Flickr