online_ads_ready3Working in the online industry, it’s easy to forget how new this internet thing is. Five years ago, the amount of online shopping was a fraction of what it is today.

Ten years ago, Amazon was far from being a household name – and Google was being run out of a garage by two guys in San Francisco.

Go back even further – say 15 years – and people would probably have chuckled if you’d explained that they’d soon be able to substitute their weekly visit to the supermarket by going online with a credit card.

This massive online economy – the one that so many of us now rely on for our income – just didn’t exist.

Advertising is changing

We’re not particularly prone to these outbursts of nostalgia, but what’s set us off today is news that the amount spent on online advertising has overtaken the amount spent on TV advertising.

That’s pretty impressive. Television advertising is used by massive brands to of reach huge numbers of people through glossy ads. And it’s expensive – even short slots to advertise on small TV channels can be too pricey for smaller businesses.

On the other hand, online advertising encompasses lots of different things, from banner ads to email and classifieds. But it’s been overwhelmingly driven by the sort of pay per click adverts you see next to Google search results.

Advertisers like these for lots of reasons. First, you can get started cheaply and it’s really easy to measure the response. You know exactly how many new customers you end up with as a result.

Things are changing … fast

Now, nobody’s arguing that TV advertising is going to disappear overnight. But this news should serve as a bit of a warning to companies who rely on it to make money.

Their income has dropped considerably over the last year (some of it recession related, admittedly), and it’s likely to continue to suffer.

The reason is simple: the amount of time people spend online is still increasing. Advertisers are going to want to follow those people, so they can continue to get in front of them effectively.

That means internet ads are only likely to grow, at the expense of other types of advertising. Good news for Google.  Perhaps not such good news for commercial TV companies.

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