In February 2008 there is a growing fear that the economy of the world will go in to a recession. For many young people, it is difficult to come to grips with this term let alone its reality. It is a word that may have been mentioned in history class when they were half asleep or by parents who remember the dip in the 1980s.
Some people say that the United States is already in a state of recession. That is, when an economy slows down and unemployment goes up. Add to that, consumers (you!) stop spending as much and that makes businesses suffer. As a result they have to let some staff go (make them “redundant”) in order to cut their costs. Then the economy slows down even more and… depressing, isn't it!
What this means for companies who wish to actively advertise their products - and this is any who wish to make a reasonable profit - they need to spend less on this important area.
In the past recession of the 1980s many organizations went away from TV advertising to advertising on the radio which was much less expensive. In 2008 it looks as if the trend will be from companies to move away from both radio and TV and shift towards marketing and advertising their products in online space. Businesses that are efficient in their web based advertising are much less likely to suffer in a recession than those who stick to a reduced spread of adverts on TV and radio.
Smart companies look abroad for ideas and one thing that has really taken off in Asia is the concept of Mobile Marketing. Apple released their iPhone in 2007 and this has helped Mobile Marketing take off in America and Europe because it gives its uses an interface which looks and behaves just like the internet. Why wait for someone to log on when you can send them an advert to their mobile phone. Not just a text ad either - we are talking here about full video and sound. In addition, consumers (you again!) can be targeted according to their demographic (that is, age, gender, colour and interests) much easier now than ever before. That means that your Gran will not receive an ad on her mobile for Nike trainers and likewise you will not receive on for a stair lift on yours!
It looks very much like the bandwagon of the moment, Apple now has a partnership with Google and Yahoo and this shows that these companies are more than likely to compete against the more traditional mobile operators in 2008 and beyond.
It is not all good news for the likes of Google, however. Its second largest market after the United States is the United Kingdom. Its growth rate in the UK halved in its final quarter of the 2007-8 Financial Year. This was bad, really, really bad! In fact it triggered huge fears that the whole marketing on the internet thing may not be about to get as huge as everyone thought. As a result the shares of Google plunged by 8% in February 2008.
It may not be as bad as all of that though! Many people believe that at the start of 2008 the UK online advertising sector is still a very new thing. Organisations spend a lot less (in terms of a percentage) on online advertising in the UK than they do in America.
So, in the early days of 2008 it looks like companies and consumers are feeling the pinch - no one seems to have as much money as they did a year ago. What happens next is a guess - but the move to the internet for advertising looks as if it is here to stay. Even if a full recession hits, many companies will still find the internet the most attractive place to spend a lot of their advertising budget.
