I have discussed the growth of ecommerce many times in the eHarbor Blog. You can find lots of information on marketers joining ecommerce in my blog entries, “Bucking recession, ecommerce keeps growing” and “Strong sales attract retailers to ecommerce.” I will continue my streak by talking about ecommerce, though in a slightly different way.
The main reason companies keep moving into ecommerce is the revenue growth this industry is experiencing each year. During this recession, consumers have cut back on most spending, but they continue to spend more online, making it a popular alternative for businesses to thrive in hard times.
However, according to an article in B to B, a magazine for online marketers, companies are starting to spend less money advertising their services and brands in social networks, such as MySpace, Facebook and Twitter. The article I am referring to is entitled, “Social network ad spending projected to contract this year.”
The growth of advertisement spending on social-media sites has slowed in recent years, from a 129-percent increase in 2007 to 33 percent in 2008, and now an estimated 3-percent loss in 2009. To put it in real numbers, $1.18 billion was spent on social-media advertising in 2008.
Social media is an excellent way for businesses to interact with customers and even gain new ones, so it makes sense for them to jump into this arena. Maybe with all of the cuts businesses are making to compensate for the decline in consumer demand for many products, social media just doesn’t seem as important at the moment.
Ironically, it seems like social-media spending is one of the best investments a business can make, especially in a struggling economy. Consumers are shifting their time and money online, making social networks popular places to reach them. Companies that shy away from social media might be shooting themselves in the foot.
I discussed social media’s many strengths and weaknesses in my blog post, “Facebook’s growing pains could transform social media.” There are plenty of reasons to stay connected with your customers online. Keep trying and stay positive!
The photo of the scissors cutting an ethernet cable is from Flickr, and it is the copyright of nrkbeta.
Tags: 2009, article, blog, consumer, Ecommerce, economy, eHarbor, facebook, growth, internet, marketing, myspace, news, online, revenue, Social Media, twitter, web
Marketers cut social media presence when they need it most…
Companies are starting to spend less money advertising their services and brands in social networks, such as MySpace, Facebook and Twitter. The growth of advertisement spending on social-media sites has slowed in recent years, from a 129-percent increa…
[...] on search engine marketing, despite the recession. In another, I point out companies are also reducing their social media spending slightly this year, after greatly expanding it over the last few [...]
[...] billion in October 2007 to about $10 billion in May 2009. That drop coincides with my blog entry “Marketers cut social media presence when they need it most.” As times get tough, companies cut back on things they consider to be nonessential, and [...]
And in another article I read that marketers, whilst cutting down on social media marketing, are doing so by around 5% of their allocated SM budget, compared to upto 80% of allocated magazine/tv/radio budgets. So it’s not all that bad.
Perhaps this article should look at the issue of diverting other media marketing budgets to bolster SM budgets.