2009 Ends, Hard Times Continue for Consumer Electronics Brands

  |  December 30, 2009   |  Comments

As the year winds down, the sellers of smart phones and LCD screens still cower in the bottom of the funnel.

To judge only from ad spending reports, one might think digital marketing is still living high on the hog while other mediums are trampled underfoot. Zenith Optimedia and Magna Global both recently predicted steady growth in the sector, while TNS Media Intelligence said Internet expenditures held strong during the first nine months of 2009.

The truth is more complicated. The online ad sector has been racked by layoffs over the past year as clients nix flashy brand campaigns. Nowhere is this truer than in the consumer electronics industry, where the sellers of smartphones and LCD screens are still advertising heavily -- but mostly using cheap direct response media.

Lana Femiak, media supervisor at Dentsu America, said the recession has benefited online to an extent as big consumer electronics clients seek cheap alternatives to TV.

"A lot of clients have been investing more online as opposed to TV," she said. But Femiak said the sites that are winning those dollars are direct response-oriented.

"We tend to invest more with bottom of the funnel and endemic sites," such as shopping properties, research sites, and search, she said. "Branding and awareness is not the first place we look."

Adam Kasper, SVP and director of digital at Media Contacts, agreed. He said price-conscious shoppers have forced electronics brands and retailers to shift budgets toward bulk direct response buys with targeting layered on. Kasper argued portals and ad networks are better positioned to capture those dollars than smaller content properties.

"Content sites aren't seeing as much, because they have a harder time meeting lower price demands," he said.

That has been borne out in the experience of some publishers. Nick Denton, publisher of Gawker Media, said last month that electronics brands are not spending on holiday ads to the degree hoped.

"Some of these smartphone buys aren't quite as big as we would have expected," Denton said. He called that "fairly shocking, given the heat in that space."

Through its Gizmodo tech blog, and other guy-focused blogs such as Kotaku and io9, the branded blog network has learned to count on big Q4 media buys from the likes of Sony and Motorola. And the first half of the year was strong, which may have lulled the Gawker sales team into a false sense of security.

"We did much better than expected in first half, so allowed our hopes to get up," he continued.

Meanwhile some direct marketing channels are reporting strong results in the same category.

Kontera, an in-text ad network, has trumpeted an 80 percent growth in advertiser spending since last holiday season. The performance-based ad seller said it's trafficking twice the number of consumer electronics campaigns and that the average budget is about 40 percent larger than it was the previous year.

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ABOUT THE AUTHOR

Zachary Rodgers

Until March 2012, Zach Rodgers was managing editor of ClickZ's award-winning coverage of news and trends in digital marketing. He reported on the rise of web companies, data markets, ad technologies, and government Internet policy, among other subjects. 

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