In this podcast, Dan Leben of Robert W. Baird and Co. shares his thoughts on advertising, publishing, and marketing companies who are just now emerging from a slow period during the recession. Leben was chosen as a top analyst in The Wall Street Journal's Best on the Street Analysts Survey this year in the Advertising and Publishing industry. Data for the survey is provided by FactSet Estimates.
Leben discusses new media's non-traditional advertising approaches, such as the service provided by sites like Groupon and Living Social. He also talks about traditional online ads, such as banner ads, versus various social media-driven outlets.
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Marketers look for the most cost effective placement that drives returns, so the search engine or online advertiser that can make the best model for placing the right ads in front of the right eyes will always win—this is specifically why people are excited by Facebook, because it allows advertisers to mine user-entered data
One challenge that advertisers face today is that there will eventually be a cash and benefit equilibrium between banner ads on online publications and print ads in the circulation copy; it has not happened yet, but when it does, it may stablize the advertising industry as a whole
Sometimes investors forget that even though there are many exciting options for electronic advertising, circulars are still very effective, some firms such as Valassis Communications have had success with direct mail business lately
If you trace advertising back to cable TV, what ultimately happens is that advertisers shift their budgets around to accomodate new media formats, and this is also happening with the internet; in short, advertisers don't increase budgets, so new formats steal from old
In the first half of 2010, we saw a cyclical swing back to spending on advertising dollars; advertising is a very cylical business and now we're seeing more dollars pour back in
Since there is still a long way to go before paid content becomes acceptable online, advertisers are bringing in much more revenue from online publications than paid content, and that will continue to be the trend for a while
Check back soon for the next installment of Talk to the Analysts, which will release next week.
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