17 Mar 2010

Advertising is doing just fine, thank you.

Online advertising is worth $50 billion, and growing exponentially.

The Battle Royale that everyone's got their eyes on is Facebook vs. Google. And what exactly are they vying for? Advertising revenue.

Facebook hasn't turned a profit yet. But just its potential to do targeted advertising has pushed it's valuation to around $15 billion at last count.

Google makes healthy profits. And about 95% of it comes from one business. Yes, you guessed it, Advertising! That's also probably why Google's valuation is a tad higher than Facebook at $200 billion.

Offline advertising is worth $500 billion, and not exactly shrinking.

WPP is by far The Big Daddy with billing close to $59 billion in 2009.

But the company said, in a recent statement, that it was “staring into the abyss” the same year!

And WPP was not alone. The two other biggies, Publicis and Omnicom too were afflicted by vertigo in 2009.

But was it a bad year for advertising? The money trail is an emphatic, "No".

Investors seem to be implying that the best and most effective advertising is yet to be... Some are betting it's online - Facebook, Twitter or Google. Some swear its in a mobile / handheld device - iPhones, Blackberrys and iPads.

Even WPP earned 25% of its revenue in 2009 (over $2 billion) from digital-related and direct advertising.

Maybe, it has not been a bad year for all advertising. Maybe, it's been a bad year for those who do it the wrong way.

Maybe, 2009 will be the prelude to the most productive era in Advertising!

No comments: