Twenty years ago this week, the first Internet advertisement, or banner ad, made its less-than-spectacular debut. Hotwired, the precursor of Wired, placed a simple online advert that ran on the popular Web browser Netscape. Although the banner ad was hardly impressive (Netscape only offered a palette of 16 colors to use), it set in motion a revolution in advertising.
In 1994, most companies and advertising firms were unable to wrap their arms around and understand what the Internet was or how it could be harnessed to advertise. Indeed, just 10 years later, online advertising represented only 3.5 percent of the total global expenditure. In the past 10 years, however, with the advent of better tools and a clearer understanding of how to value online ads, companies have shifted up to a quarter of their advertising budgets to online. According to Statista, that spending will reach one-third by 2018, eclipsing television as the top advertising expenditure.
What does this mean for entrepreneurs?
The clear answer is that companies and brands must be online to be relevant. The less clear answer is where and how. The incredible speed at which smart devices (phones, phablets, and tablets) have penetrated the marked and been adopted by users worldwide has set in motion its own shift in advertising. Consider, for instance, that according to Ericsson Mobility Report there will be 9.2 billion mobile subscriptions by 2020, with more than 80 percent using mobile broadband to access the Internet.
The computer is dying.
Add to this advertising conundrum the fact that cable, our primary means of consuming television, is rapidly decreasing in relevancy. More consumers are "cutting the cord" with cable providers, opting instead to stream shows through Apple TV, Netflix, and Hulu or directly through a mobile app. Networks, while slow to adapt, are starting to come around. Both HBO and CBS, for example, announced this month that the broadcast giants will offer on-demand streaming of shows in 2015.
Television is also dying.
So what should entrepreneurs do to stay ahead of this ever-changing game?
Go back to school. If you do not understand all of the complexities of digital marketing, do yourself a favor and learn them. There is no shortage of information on digital advertising online to read, and these days you need not put your business on hold to take professional courses. Consider any number of online resources, many at no charge, that you can tap on your spare time, and organizations such as Online Marketing Institute that offer numerous courses and even certifications.
Bring on help. If you can afford it, it is worth bringing expertise into your business. Talk to colleagues and do your research about digital marketing skills you should look for in candidates. If a new hire is not in your plan, consider hiring a firm. There are numerous digital advertising agencies, so do your research and be clear about what you need to understand before you select a firm.
Remain flexible. It is important for entrepreneurs to understand that the digital marketing and advertising landscape is changing every year. In fact, it may change a few times in a year. For traditional entrepreneurs who look for reliable advertising channels to reach consumers, it is a good idea to get comfortable with the fact that nothing will be the same in the future.
The great thing about this evolving revolution is that it provides opportunities. As advertisers and big businesses continue to wrestle with understanding this changing industry, small businesses and startup entrepreneurs, who ordinarily might not be able to compete budget-wise with larger competitors, can take advantage of the lowered barriers to entry.
It will be interesting when we look back on banner ads in another 10 years for their 13th anniversary. By that time, we may just be seeing the maturation of advertising through virtual reality or an altogether new generation of media.
What do you think are the digital marketing and advertising trends of the future? Please share your valuable thoughts with other entrepreneurs below.