Amazon's recently announced Q3 earnings are not as telling for online marketers as, say, the hopeful results delivered by Yahoo, Google and Microsoft.
Still, the online retailer's performance this past quarter - a 69% increase in profits - also bodes well for online advertising as the holiday season approaches. Amazon is forecasting sales for Q4 to grow between 21% and 35% to reach between $8.1 billion and $9.1 billion.
Cheerier Prospects
Reports from various sources indicate that the 2009 holiday season holds cheerier prospects for online marketers compared with last year. Adam Epstein, president of online ad network adMarketplace, is forecasting an uptick in online ad spending for the year's end - led by retailers pitching products for the holidays. Epstein, who made his comments to Investor's Business Daily, said that he expects AdMarketplace's clients to boost spending by 10% in Q4.
"There is a sense of consumers coming back and pulling out their credit cards and making some purchases," he said. "We saw some growth in ad spending beginning in the third quarter, and that definitely should continue in the fourth quarter."
Chris Paradysz, CEO of online marketing agency PM Digital, expects his customers, particularly retailers, to increase their ad spending by 3% to 5% in Q4, Investor's Business Daily also reported, citing a JPMorgan poll of 20 media buyers that found that 12 expect second-half ad spending will be up 5% to 14% vs. the first half of the year.
Best Buy is also expecting higher sales this season, banking on luring customers with competitive pricing and better showcasing of its services - a key aspect in its advertising and viral online marketing on Facebook and Twitter, Reuters reports.
Earlier this year, Best Buy began using social media to answer questions about its products or services, according to Retailer Daily.
More than Half to Shop Online
The recent “2009 Mindset of a Multi-Channel Shopper” study from MarketLive and the e-tailing group found that more than 55% of US consumers plan to do their holiday shopping online in 2009, and 26% plan to purchase more gifts over the internet than they did last year.
These figures have increased since 2008, when the same study revealed that only 49% of consumers planned to shop online and 21% planned to purchase more gifts over the internet. In addition to the increase in shoppers buying holiday items online. Other report findings:
- 88% of shoppers are willing to pay full price for hard-to-find products, customer conveniences and effective customer service such as an 800 number.
- Books, clothing, music, gift certificates, toys, and consumer electronics are the top product categories shoppers are likely to purchase online by at least 33% of respondents.
Sales Still Flat
Though retail sales forecasts for this year are mixed, prospects for online retail sales - and by extension, online advertising -this holiday season look good when stacked up against last year.
Comparison shopping site PriceGrabber.com's Holiday Forecast shows, for example, that 53% of consumers expect to spend less on holiday shopping this year than last year, an improvement from 2008, when 71% of consumers expected to decrease their annual holiday spending.
Still, 2009 holiday spending overall is likely to be constrained this year, both online and off. The National Retail Federation's 2009 Holiday Consumer Intentions and Actions Survey, found that average US consumer spending will decrease 3.2% compared with last year. And a significant two-thirds of Americans (65.3%) say the economy will affect their holiday plans this year, with 84.2% of them saying they’re going to spend less.
