Tuesday, July 12, 2011

Price Transparency Causing More Brand Advertising?

Oddly enough, as knowledge about pricing rapidly shifts in favor of consumers equipped with smart phones, there's trouble ahead for retailers who cannot offer the lowest prices, but opportunity for a renaissance of brand advertising, argues Gian Fulgoni, comScore chairman.

Advertising's role in this new world becomes not just a demand driver but also a counter-balancing force to price as the main determinant of consumer choice.

Ad spending trends support this conclusion, he argues. TV ad sales rose nine percent in the first quarter of 2011, while the Interactive Advertising Bureau just reported a 23 percent growth in online advertising. Tellingly, in 2010, display advertising grew faster than search, for the first time since the IAB began reporting its data, driven by a 35 percent increase in spending on video ads, Fulgoni says.

The numbers indicate a new-found focus on branding advertising at the expense of direct response or price or promotion communications, he argues. Others might not be quite so sure. Advertising is rebounding from rather deep reductions caused by the great recession of 2008.

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