Internet marketing has seen a rise in demand year on year. The last few years have seen an exponential increase in businesses advertising and marketing over the internet. Internet marketing offers an excellent opportunity for a business to reduce costs, lower its risks and access an unlimited global market. Even smaller businesses today realise the true potential of internet marketing.

Following are some factors that have contributed to the rise of internet marketing in recent years:

Economic Recession

The economic recession has forced businesses to rethink their strategy and reduce business costs. Most businesses have had to reduce operating costs in order to remain competitive and profitable during volatile economic conditions. Marketing and advertising have been one of the worst hit activities of a company. Lower working capital has forces companies to lower advertising and marketing expenditure. While larger companies have seen huge reductions in marketing budgets smaller companies and are more cautious in spending on marketing and promotional activities.

Shift from traditional advertising to internet marketing

The last few years have seen a shift from traditional marketing methods towards advertsing on the internet. Leading newspapers, magazines and other publications have seen a fall in demand while online publications and portals have benefited from increasing advertising demand. Search engines such as Google and Yahoo have seen one of the largest increase in demand over the last few years. Social networking websites such as My Space and Face book have also reported a similar rise in advertising demand. Online advertisements forms the largest revenue stream for many established websites and portals. A recent study published in the Guardian Newspaper has reported that online advertisers are continuing to spend more in spite of poor overall sales. This can be largely attributed to the shift in advertising practices by businesses.

According to marketing analysts, increased competition by businesses on the internet may cause growth to slow a little in the future. However in spite of this total spending on online advertising spend is still expected to increase manifold over the coming years.

Changes in Consumer behaviour

There are approximately 1.5 billion internet users in the world today and the it is growing every month. The sheer size of internet population provides businesses with a global platform to do business in. In many countries, eCommerce sales are growing faster than traditional high street sales. Online sales in UK for 2008 crossed the 50 billion mark, which was an increase of almost 27% from the previous year. Similar trend is being witnessed in many parts of the world. Today, a significant percentage of business is either done online or is influenced in some way by the internet.

Studies and reports published recently have only confirmed the strength of internet marketing in UK.

According to the latest UK e-Retail report published by a leading independent research organisation, online retail purchases is expected to cross the £20 billion mark in 2009. This is an increase over 13 per cent from the last year.

Similar trends are also being experienced in Other international markets. In US, while the end of last year proved to be one of the worst performing months for retail sales, the mood in the online market was upbeat as internet companies continued to predict positive growth in sales.

Growth of video advertising

The growth of Video on the internet has also been an instrumental factor in the emergence of online advertising. The continued rise of broadband is a key factor in its growth. Video on demand over the internet has proved popular among businesses who are now able to deliver a level of interactivity that was previously unimaginable. Marketing Experts predict online video advertising to be one of the fastest growing marketing channels in the coming years. video over the internet allows businesses to deliver innovative TV style advertising at a much lower cost.

A leading internet marketing research group forecasts an over 30 percent increase in online video ad spending this year. Even TV Networks and stations are now moving their programming on the internet, creating environments that is appealing to major advertisers. Many businesses now see online video advertising as being complementary to advertising on television.

Growth of Mobile advertising

The rise internet usage on mobile devices offers a new advertising channel on the internet. Mobile internet has been one of the fastest growing areas of the internet. The wide availability of low cost, high quality multimedia phones and wide availability high speed mobile networks are largely attributed to be the main factors for the exponential growth of internet usage on handheld devices. Mobile advertising thus offers a great opportunity for marketing.

Mobile advertising in the form of text messages and more recently SMS have already been in existence for quite some time. However new areas such as videos, interactive banners and search advertising are changing the face of mobile advertising by offering new opportunities to offer an innovative and enriching user experience.

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