It is my belief that all business will take a hit over the next 2 years, but it is in this time that the internet has a unique advantage to accelerate its already predicted growth to take a bigger chunk of market share from traditional business. My top 10 reasons:

1. Gas: ecommerce companies offering free shipping married to people who don’t want to use their precious gas will drive more online sales.
2. Price Comparisons: People are going to take advantage of the ease of use of comparing 50 stores online in minutes versus taking a weekend driving around the city.
3. Advertising Efficiency: Although there will always be a huge place for traditional advertising, with online advertising and a good analytics program, you can see exactly where every dollar goes. This is much more attractive to businesses in a down economy.
4. Less Big Brand Advertisers: Big advertisers will start cutting budgets, leaving plenty of open ad space for a flurry of little guys to come online. Its the little businesses that make up the internet, bring them on!
5. Previous Brand Reluctance: believe it or not, there were many manufacturers that were reluctant to let retailers sell their product online. I would imagine this restriction will dissolve as they are scrambling to find anyway to sell their products. If more retailers can sell more unique brands online, more buyers will come.
6. TV Shows: As brands slow ad spending dollars in the TV DVR world, Television shows will start to become more aggressive in showing their shows online, which opens up all sorts of online ad dollars. Online TV is protected from DVR’s as the site can decide to put controls on. More people watching shows equals more money for ads on those shows.
7. Investment Dollars: As more people go online, more money is made online. As more money is made online, more investment dollars will be thrown at it. The more investment dollars thrown online, the bigger online businesses get. The bigger they get….ah, you know where this is going…
8. Lower overhead: most online retailers’ overhead is significantly lower than traditional brick and mortar retailers. Because of this, prices are lower. If prices are lower, people can buy more things, and spread their dollars over a couple of businesses versus just one. Consumers saving money is a great way for them to spend more. Not only does this point help online, it helps the economy as a whole.
9. Less Taxes: Currently, if you purchase outside your own state, you save your state sales tax. In my case, this is 7.75%. That is a huge savings and enough of a reason for me to go online versus offline. In poor economic times, people will look for anything to save upwards of 7%.
10. Virtual Services: With people wanting to find the best prices on services, they are more likely to find more boutique service with lower overhead online and use that service virtually, versus in person. This will save them a lot of money and get the same talented person. (lawyers, accountants, consultants).

The recession is among us, that cannot be denied. Although it is self-serving on my behalf, there is no better way to gain tremendous market share in your vertical and keeping your business growing than to spend more money during a recessions versus less. Quick points:
1. Unless you are selling stock in mortgage companies, chances are there are still plenty of customers who need your product or service.
2. Unless all of your competition reads and agrees with this posting, chances are they are going to be pulling back budget to bunker down through these times, is there a better way to get your brand out there? Wouldn’t it be great to become the leader in your space? There would be no cheaper time than in a recession.
3. Unless you are a huge company with stockpiles of money in the bank, pulling back marketing dollars when the total amount of customers are shrinking could put your business in an inevitable death spiral and will take you far more cash to get out of it than just marketing.
I would love to hear comments that combat or support my theory….am I just thinking of myself here?

Too many people try too hard to get people to whip out their credit card and purchase online. Unless you are a huge brand name online, the highest conversion you can expect (the amount of sales you get divided by your total number of visits) is about 2%. I hardly see more than a true 2% conversion rate when you ask for a credit card.

Now, when it comes to gathering data (an online lead) you can get as high as 15%. If you are a good sales person, you should be able to close half of your warm leads. If you closed half, your overall conversion would be 7.5%. This is about 4 more sales that you would have if you would have relied only on your website to close the deal down.

Imagine what you would have to do to get your website to close 400% more sales. You would most likely need to do 4x the amount of marketing. What would you rather have?

Recent studies have shown unanimously that recognizable brands convert at up to 300% more than companies with no little or no brand recognition. The industry ecommerce average is hovering in the 1% range; Staples.com has a 20% conversion rate.

The problem is that companies are spending more and more of their dollars online. Online advertising companies are very direct-response driven. Clients expect to see the ROI for every dollar spent. This data has been a 2-edged sword. It is great that you can see where your dollar goes; in fact, I pitch it all day long. The problem is that the very ability that allows us to see the fine detail of where marketing dollars goes gets clients (of all sizes) away from branding and simply obsessed with a sale or conversion. In addition to this, most online businesses are not funded and require making a profit each month on its marketing dollar. This makes it very hard as a combination direct response/branding campaign is hard to pull off.

It is my belief that the internet will do a dramatic shift from its’ early pioneers of young people building seriously profitable garage-based businesses to large brands dominating the space. The “little guys” need to start coming up with a clever way to get people brand aware before it is too late.

Are you as sick of seeing the ad below as much as me?

If I see another Google ad my head will explode.

With the reach they currently have, I believe Google will start doing more bad than good for themselves. They will have the same issue that Alta Vista/Yahoo/Excite had in the 90’s. Although banner ads are now have a click through rate of under 1%, when they first came out, you could get a click through rate close to 6%.

Right now, all data shows that text ad’s kick the crap out of graphic ads all day long. The problem is that more than 50% of ad-based websites are displaying Google ad results. If people see the same thing over and over again, they will simply stop clicking on them.

Website owners, please start spreading your wings a bit. There are other ways to make money and more advertisements to make money on. The more we see them, the less often we will click.