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Due to low prices and great assortment of goods and of course to convenience of online shopping consumer expenditures have risen to high levels. According to data for the last 12 months in the
spent on online buys more than 304 billion dollars. Among them 100 billion was
spent on travelling and other 110 billion on retail purchases. USA
Companies which work only with online retail (as eBay, Amazon) were able to make real business empires due to electronic commerce. For example, Amazon has 110 millions unique visitors per month. But such triumphal march of electronic commerce means that a regular offline shop is under the threat. In other words, retailers which can’t hold their market part now will have more and more difficulties in future.
Different products categories move to online with different speed, and that makes new difficulties for retailers who work with different categories, for example, big supermarkets. Nowadays about 30% of electronics are sold thought the Internet and only 1% of everyday goods.
Moving of whole channels to the online world can have some influence upon prices and it can promote lowing of them. Internet allows finding the necessary goods on the lowest price.
ComScore data show us that part of social media according to the time which user spend in the web is higher than part of web-portals. Last year in November in the USA Facebook attracted 150 million unique users. It had 10% part from the whole number of minutes, which users spent in the Internet. But social networks are not only Facebook. The same month LinkedIn had 41 million users, Twitter – 40 million, Google+ had 29 million and Instagram and Pinterest – more than 25 million.
Users’ activity rise in social networks puts market members before new challenge: how to use new channels in order to communicate with consumer. People often expect from social networks a word of mouth effect. But there are a lot of questions. For example, how much does “a fan” of goods or brand cost? What is better: paid popularity in social networks or the earned popularity? How is it possible to calculate the profit which was received from investments to social media? Today they do a lot of studies in order to have answers to such questions.
ComScore offers a special service which is called “Social Essentials”, it helps to measure quantitatively productivity of marketing efforts in social networks, based on the demographic and behavioral composition of the audience of one or another brand in social media. Such tool also shows coverage and frequency of advertising views in social media. These options give a chance to companies to link their actions in social media with the desired consumer behavior, including brand involvement and buying activity. They also allow measuring the productivity of the current campaign.
But social media can be not only a promotional platform, market researchers think about how to make them a data source about the consumers’ minds. Some of them even believe that in the next five years social networks will completely replace the buyers’ surveys.
Increased cost of digital advertising
Spending on advertising is rapidly flowing to the Internet. According to the IAB data, in the third quarter of 2012 online advertising increased by 18% compared with the previous year. In the first three quarters of 2012 the growth was 15% it is more than 3.8% of the general increase of advertising costs during the same period in all media, in which the research was conducted. The IAB report points to significant growth in different formats, especially in the mobile Internet (+92%), video (+18%), search (+17%) and banners (+12%). The only exception is the multimedia advertising (here we see the recession in 34%)
There is a hypothesis that the high cost of such advertising leads to the rejection from this format in favor of others, especially video, which allows you to transform 30-second video into 15-second easily and inexpensively. At the same time, advertisers and agencies are more and more concerned with the limitation of available advertising space and time. Many say that price for thousand shows of the video often exceeds the price for ads on TV.
It is clear, however, that the more exact the targeting will be the more consumers will be involved and the faster the video rate in the Internet will live behind the price for ads on TV.
Audience targeting or specific publications
The availability of strange platforms and exchanging them in real time helped to the spreading of such phenomena as buying audience through the computer via cookies. According to some rates, about 20% of all display ads views are buying with the help of auctions in real time. This figure will continue growing. The advantages of methods of buying the audience are well documented.
But there is a negative side too: publishers are anxious about the trend towards lowering the prices for ads. This, in turn, led to the creation of private SSP which make possible the acquisition of specific audiences on web sites with the help of program. There is a hope that it will help publishers to protect their premium prices, but giving the opportunity to advertisers to enjoy some advantages of buying audience at the same time.
About the author: Paul Smith provides the students with online writing help. He is especially interested in online marketing and web promotion. You can ask him any questions at Google+