What You Should Know About the Movement Toward Online Ads

Nov 20, 2015, 10:00am EST

As big business increasingly moves to online ads, what does that mean for your small business?

Recently, Hallmark, which traditionally airs heartfelt TV ads during the holidays, announced its intentions to move advertising online this season. Whereas small businesses have navigated online advertising as a viable, cost-effective way to promote, giants like Hallmark and BMW that once relied heavily on TV commercials as their advertising base seem to also be moving online.

With many consumers skipping TV ads, those companies seem to be making a strategic move, believes Eric Lofholm, president and CEO of Eric Lofholm International, Inc. and author of How To Sell In The New Economy. “There are a couple of reasons for this shift,” he says. “First, millennials don't watch TV anymore. Instead, they're moving to online streaming services, and advertisers are losing out on this young audience, 18 to 34, in the television format.”

Broad marketing efforts may not be as efficient as the targeted ones online, adds Brett Glass, founder and CEO of Gift Card Impressions. “The generational differences of today’s consumers require different messaging, and they view these messages through different means in today’s digital world. Hallmark’s move makes sense as they attempt to make a larger impact on the fastest growing consumer segment, the millennials, who are less traditional than the baby boomers.”

Kirill Storch, Internet marketing strategist and CEO of Electric Web, agrees. “Hallmark's recent move to 100 percent digital is significant in the sense that it is a venerable company and the ritual of watching tear-jerking Hallmark commercials on TV has become a rite of passage in many American homes. The fact is that Hallmark has had a robust digital strategy for a number of years now and this latest step was consistent with the trends. Anyone who has their finger on the pulse of digital advertising knows it's growing quickly.”

Moving from TV to online ads makes financial sense, adds Richard Krevolin of Power Story Consulting Inc. and author of THE HOOK: How to Share Your Brand’s Unique Story to Engage Customers, Boost Sales, and Achieve Heartfelt Success. “Online allows companies to target their demographic more carefully with cheaper buys, and it also allows them to produce longer videos online that will outlive their 30-second TV counterparts. They can create a 60- or 120-second ad that can be shared over and over free of charge.”

Inevitable Shift
As consumers spend an increasing number of hours online, brands should get in front of them in the places they're actually spending time, believes Nicole Kroese, vice president of marketing and partnerships at Likeable Local. “Failing to adopt an online ad strategy means missed opportunities to convert new business. And with online marketing comes huge advances in tracking and reporting, agility and, in many cases, cost-optimizing, which create new efficiencies for advertisers.”

As advertisers see a downtrend in the return on investment through traditional marketing forms such as TV, print and radio, they’re finding it necessary to spend their marketing dollars on Internet marketing, but many advertisers are scrambling to play catch up while entering the space, believes Joshua Keller, cofounder and president of Union Square Media. “The only reason why online marketing is being ignored by some is that advertisers do not understand how to optimize it. There’s been a push and pull trying to fend off Internet marketing, while now it's undeniable that they have to adapt.”

Help or Hurt Small Business?
There's concern whether big companies' move toward digital advertising could cause more noise online for consumers, possibly raising prices for small businesses or even making it tough for them to get impressions in front of their consumers, notes Kevin Layton, CEO of Data-Dynamix and author of Building your Digital Marketing Machine.

Lofholm believes that this trend can actually give small businesses a leg up. “No longer is advertising as expensive of a proposition as it was 10 years ago,” he says. “Small businesses are able to pick and choose ad space and ad formats via programmatic ad buying, lowering their costs and narrowing in on the audience they want to reach.”

Big business in the mix online could raise costs, but online, a small company can do just as good a job as a major corporation, notes Krevolin. “So, the small business has to be better at telling their story and targeting their market," he says. "However, online consumers tend to accept lower quality videos than TV consumers, so small businesses need not rely on huge productions to create their content.”

And the number of opportunities to deliver ads online are much greater than in traditional TV advertising, which may have between three and four commercial segments per show, points out Jay York, senior digital marketing strategist for EMSI Public Relations. “This means there is room for both the big retailers and the small businesses that are both seeking the same market," he says. "It may actually encourage more small businesses to use these mediums for ad delivery.”

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