“Traditional” Television Advertising is becoming Obsolete

Advertising agencies need to look at “Google-like” advertising model ‘Cost-per-Action’ if they want to survive:

Advertisers will be spending significantly less on television and increasingly more on online advertising in the next couple of years, according to a poll of major advertisers by Forrester and the Association of National Advertisers, writes ClickZ. Some 78 percent of the surveyed marketers said the effectiveness of their TV advertising has diminished in the last two years. Some 80 percent said they would instead invest more in web advertising, and 68 percent pointed to search marketing specifically. MarketingSherpa also recently released its Third Annual Study of 680 attendees from the ad:tech trade shows who responded to the survey in the second half of December 2005. The survey illustrated that in-house blogs and RSS feeds were the favored emerging tactics for marketers, which indicates that targeting consumers is not just about cracking the code on how to get consumers to click and buy online, but is also about the online medium in which advertisers target consumers.

Google was built on the backbone of Cost-per-Action and is a model that spurs market competition by lowering the barrier to entry for many advertisers. It works on a bid basis for more frequent placement where the advertisers only pay for results.

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