The ads we love to hate

(11) In fact, consumers have been telling market-research companies for 50 years that they do not trust advertising. But they have become even more negative about it recently, says Eric Schmitt of Forrester, a research firm. Indeed, people are actively looking for ways to avoid ads, using tools such as pop-up blockers on web browsers and digital video recorders (DVRs) that allow them to skip the ads when they record TV programs. Forrester found that 60% of the programs watched by DVR users are recorded, and 92% of the ads on such programs are skipped. The firm reckons that by the end of 2008, 36m households in the United States will be using DVRs. So what will happen to the $60 billion spent on TV advertising in America every year? Mr Schmitt thinks that if the TV industry can no longer guarantee its audiences, a lot of that money will move elsewhere.

(12) For the moment, advertising expenditure gives no hint of trouble ahead. The business is bouncing back strongly from the slump that began in 2001, when the bursting of the technology bubble caused a sudden collapse in ad spending. Worldwide advertising expenditure on the mainstream media and the internet in 2004 grew by around 7% to $370 billion, estimates ZenithOptimedia. Universal McCann, a media-services firm, uses different measures but sees a similar recovery. It says that in America last year $264 billion was spent on national and local advertising and other marketing, such as direct mail (a $50 billion business), up 7.4% on the previous year. And it expects ad spending in the world’s biggest market to grow by more than 6% this year.

(13) But the way that money is spent is changing. In America, growth in ad spending is led by the internet, Spanish-language TV and cable networks, according to TNS Media Intelligence, a media-monitoring company. And as with P&G’s $4 billion advertising budget, a growing proportion is shifting from mainstream media, such as television, radio and print, to new media and other forms of sales promotion, such as direct mail, public relations, promotions, sponsorship and product placement. Collectively this sort of spending, sometimes called “below-the-line” advertising, or marketing services, is already worth more than twice what is spent on traditional display advertising. Together, the two sorts of spending added up to more than $1 trillion last year, says WPP.

(14) By comparison, the $10 billion or so spent on internet advertising in America last year looks tiny. But it was 32% up on 2003, according to a study by the Interactive Advertising Bureau and PricewaterhouseCoopers. And that growth is accelerating, leading some forecasters to suggest that the online ad market could double in value this year. The internet is also becoming a lot more sophisticated as an advertising medium, beyond banner ads and pop-ups. In search advertising, companies buy words that, if they appear in searches made on sites such as Google or Yahoo!, will bring up a link to the company’s website, displayed alongside the search results. The advertiser pays only if someone clicks on his links. This makes the results of search advertising reassuringly measurable, because tracking how many people go on to make a purchase is relatively easy. Google is beginning to work like an advertising agency, placing small text-based ads on other people’s websites on behalf of its clients and splitting the revenue with the website owners. Google’s software scans the sites to match the ads it serves up to the site’s content.

(15) Local search could be the next big money-spinner on the internet - for whoever comes up with a winning formula. Microsoft’s MSN site, for instance, will provide details about a local shop, and a map to get you there. A9, a new search engine from Amazon, has a feature called “Block View” with pictures of streets and their shop fronts, so if you have forgotten the name of the restaurant you are looking for, you may be able to recognize it in the picture. The next step will be a feature that allows users to “click to call”. Initially this service is likely to be free, but in time it could be developed into another big source of online revenue.

►Find words/phrases having the same or similar contextual meaning with those boldfaced. Insert them into sentences in the appropriate form. Now translate the sentences into Russian.

►Summarize the content of the paragraphs #11-15 keeping to the following guidelines:

1. Consumers have become even more negative about advertising recently.

2. The ad money will be spent… but in another way.

3. The online ad market forecast.

Date: 2016-01-14; view: 761