Hallerman: Reactions to the recession reinforce the Internet's place as mainly a direct response medium. Tight budgets push marketing decision-makers toward spending on the sure thing. For the Internet, that means search advertising. In 2009, U.S. marketers will put over $1.4 billion additional dollars into search, according to eMarketer's projections. At the same time, brand marketers dissatisfied with results from traditional media such as radio and newspapers are shifting greater shares of their budgets to interactive advertising. Increasingly, much of that money is going toward online video ads, where spending grew by nearly 127% in 2008 and will likely soar by 43% in 2009—strong gains in a recession year.
BtoB: Where do you see the biggest growth in online advertising and why?
Hallerman: Viewed by percentage increase, online video advertising is the hottest area in the Internet space. Video growth is like a stool which needs three legs to support it. For online video advertising, the three legs are marketers, who want its branding power; Web publishers, who want its higher revenues; and the audience, which is increasingly willing to tolerate ads in exchange for professionally created content, such as TV shows and movies. However, when you count the incremental dollars, search advertising is still the champion. Search advertising's immense relevance to users is one prime factor behind its continued growth. The wide range of marketers that use search also contributes to spending gains. Companies use search for both branding and direct response objectives.
BtoB: How is Internet advertising creating a new model for all types of advertising?
Hallerman: Successful Internet advertising creates a new paradigm for marketing across all media. Search is the prime example of this new model. When marketers link ads to an individual's stated interest at the precise moment that interest is expressed—as with a search query—the high relevance breaks down the usual resistance. Advertising that customers welcome is the new reality, combining effectiveness with efficiency for marketers.