This is a question many marketing executives will be asked to answer in coming months. The cost of acquiring customers in tough times can rise substantially, especially when sales are harder to find and nothing is done to lower cost of sales. The current economic situation will compel marketing leaders to adjust their marketing mix to lower cost or lower cost of acquisition.



It may not come as any surprise to you that increasingly these people will look to the internet. Many have known that there are opportunities online but there has not been the stimulus to explore the channel. Why? Let's examine some facts...

In March this year, The UK Online Advertising Report found that online advertising trends were steadily growing and they predicted continued growth through to 2012. The reason given for growth in on-line advertising is "growing agency expertise and advertiser awareness".

These trends are reflected in other markets like USA and Australia. This is what I believe will compel more businesses to invest more aggressively in on-line advertising:

- Consumers are increasingly researching their needs online

- The internet is being used by young people as a source of entertainment, replacing time viewing TV etc

- Internet advertisers to not pay for impressions (i.e. other media such as TV and newspaper advertising charge for displaying your advertisements. Search advertising only costs the advertiser when someone responds to the advert

- Ability to measure performance.

You only have to look at what is happening in your own household to see that we are spending less time watching television and reading newspapers and magazines and more time on the internet. This is more evident in younger generations. My teenage children spend little time in front of the television today and a significant amount of time on-line; networking with friends, researching for assignments or just 'Googling it'.

Additionally, many homes now have more than one computer and more and more people are browsing the internet from mobile devices like personal digital assistants or mobile telephones. This means more access to on-line media.

The cost model for on-line marketing services is different from most other advertising media. With television advertising, you pay for 'impressions', i.e. the number of times that an advertisement is aired. Print is similar; you pay a fixed fee for an advertisement to be distributed with the paper or magazine. Mail drop is similar again; you pay for the number of postboxes that your advertisement is delivered to. What is similar with all these models is that you pay even if no-one shows any interest in your offer.

What makes on-line advertising cost-effective is that you only pay for an advertisement when someone clicks on your advert and visits your landing page. These are qualified visitors; they have already expressed interest in your offer.

Another very attractive feature of on-line advertising is metrics. The internet, unlike other media, can provide detailed insights into the effectiveness of advertising. This insight enables marketers to continuously refine campaigns to improve return on investment. Not only that, it provides marketers with the evidence they need to convince CEO's to invest in marketing. CEO's appreciate this because they can see what they are getting for their investment.

As the effects of a hardening economic cycle take effect, businesses across the country will begin looking to the internet to lower cost of acquisition. The beneficiaries will be those who establish strong on-line brands and refined marketing campaigns.