Facebook to Pass Yahoo Inc., Top Online Display Advertising Dollars in 2011

According to a recent Reuters article, Facebook's U.S. advertising revenue will total approximately $2.2 billion in 2011, consisting of a 17.7 percent share of the U.S. market for graphical displays that appear on websites. This is an increase from Facebook's 12.2 percent share last year and vaults Facebook to the top spot in online advertising revenue, which formerly belonged to Yahoo Inc. According to Reuters, "the figures underscore the growing clout of Facebook, the world's No.1 Internet social network."

The overall U.S. display market's growth in 2011 is projected at 24.5 percent, and Facebook is not the only company reaping the benefits. Writes Reuters: "Internet companies such as Yahoo, Google Inc and Microsoft Corp are competing for those advertising budgets, while new players such as online coupon company Groupon are offering marketers alternatives to traditional online display ads." Google will earn an estimated $1.15 billion from U.S. display ads in 2011, up 34.4 percent from last year.

The article is based on an eMarketer report.

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TV Industry, Marketers Change Tune, Start Focusing on Older Clientele

According to a piece in the New York Times, advertisers and media executives have started to rethink their strategy of primarily targeting younger consumers, responding instead to an economic reality that has older people vastly out-earning the young. Carter and Vega write: "Marketers like Kellogg’s, Skechers and 5-Hour Energy drink are broadening their focus to those 55 and up, who were largely ignored in most of their media plans until recently." They continue: "Network executives are planning to introduce shows created to have broad appeal, including to older viewers and the ad dollars they represent."

The reason for the shift in a strategy that has been in place since the 1960s is largely one of numbers. Younger people have been hit harder by the recession: the unemployment rate for individuals aged 20-24 is 14.2 percent and for those 25-34 9.4 percent, as compared with only 6.2 percent among people aged 55-64.

Median earnings between the age groups are similarly disparate, again favoring older age groupings. Individuals aged 45-54 and 55-64 had the highest median weekly earnings of any age segment, coming in at $844 and $860, respectively. On the other end of the spectrum, people aged 20-24 averaged weekly earnings of only $454, while those aged 25-34 had median weekly earnings of $682.

Carter and Vega write that until recently, "Once viewers reached 55, they were considered all but valueless." But older people--especially as the impact of the recession still lingers strong--have more money to dispense with than other age groups, consume a lot of media, and, according to Stephanie Papas, a source quoted in the article, "remain optimistic."

Since 2006, "the median age for audiences for every broadcast network has moved upward," and a NBC study suggested that older "consumers also seem to be spending on categories not traditionally associated with" their age group. This includes areas--such as electronics and digital devices--that are traditionally associated with younger consumers.

Says Alan Wurtzel, president of research for NBC Universal, about those who fail to begin targeting an older clientele: “You risk not only growth, but at some point you risk your brand.”

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The New Rich?

Wealthy people were considered to be less hurt by the economic downturn than the poor and middle class were, yet a new study from marketing consulting firm Harrison Group suggests that consumer habits have changed in the aftermath of the economic downturn. In a study of Americans with an average annual income of $275,000, Harrison Group found that wealthy consumers were less willing to pay for the large markups on name-brand goods in the first quarter of 2011 than they were in 2010. While the survey found decreasing brand consciousness and increasing use of sales across the survey, the largest change came in response to a question on willingness to spend on stylish brands. In 2010, 51% agreed that they were willing to "spend more for designer brands because they [were] the most stylish and fashionable," compared to only 32% of consumers in the first quarter of 2011. The survey results represent only one financial quarter of each year, and seem strange since the economy actually improved between 2010 and 2011. If the trends continue, this would represent an important change in the behavior of high income consumers and, as a result, in the ways that high-end companies market to reach them.

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