Google, though, is starting to provide an answer. In a bid to build a brand-advertising business, the search giant is using its vast trove of data culled from search queries and web traffic to measure the effectiveness of brand advertising.
2 years ago
Lowest ad spend over GDP ever
I’m at the BCV CEO summit this morning, and the speaker (a managing director of Bain PE) has just pointed out that ad spend as a percentage of GDP is at its lowest percentage ever, or at least in memory. At the moment it’s at 1.6% of GDP, down from a 2.5% norm.
There’s a lot of room for growth here.
And that growth isn’t going to come from banners. Most of it isn’t going to come from advertising as we define it today. The large part of growth is going to come from investment in earned media.
The Growth Trap
A lot of marketers spend all their time focused on growing their audience… makes sense, it’s easy to quantify and it increases the reliability of re-activating someone that was previously touched by a campaign.
It’s starting to move to the extreme though, where consumer marketers are so focused on their growth numbers, that they completely forget to measure engagement. I’ll call this “The Growth Trap” — their audience grows, but becomes less engaged with the product, creating a less stable consumer base and a bigger upside for an attacking competitor.
If you’re in high-growth mode, make sure you continue to measure engagement — If that number drops to much, re-evaluate if your product is ready for the new market you’re growing into.
Facebook is a good example of perfect growth — in 2009 they went from 100M to 300M users and retained the fact that 50% of their audience logs in daily.
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