Ads Assisting Online Sales Growth

Released on: Thursday, July 26, 2007 8:00 AM

    

Ads Assisting Online Sales Growth

Online sales are expected to grow nearly 18 percent this year.    According to a recent report, total 2007 online sales are expected to rise to $259.1 billion.  One sales growth driver is effective web advertising.  Companies making steady gains have several communications factors in common.  The most important thing they get right is thinking in “pictures” rather than “words.” Keep it visually simple, try for interactivity and use complimentary rather then competing messages. We can now see Oreo cookies being dunked and McDonald’s new salad being spun in online ads.  Crystal Light added interactivity. Kraft colorfully invites visitors to its ads to actually mix its Crystal Light On the Go product into a bottle of water.

Travel and non-travel online spending are tracked separately. Online purchases excluding travel will reach $174.5 billion. This strong growth will come off of an impressive performance in 2006. Total 2006 online sales last year rose 25 percent to $219.9 billion. Excluding travel, online retail sales rose 29 percent to $146.5 billion, representing six percent of total retail sales in 2006.*

*How retail is tracked and reported differs by reporting organization.  Traditionally, retail sales are defined as excluding travel related purchases.   Generally, retail sales statistics do include the following categories: apparel, accessories and footwear; computer hardware and software; autos and auto parts; home furnishings; consumer electronics; music and video; appliances and tools; office supplies; sporting goods and apparel; books; toys and video games; gift cards and gift certificates; event and movie tickets; food, beverage, and grocery; jewelry; flowers and cards; over-the-counter medicines and personal care; computer peripherals; baby products; cosmetics and fragrances; and pet supplies.

Some sources choose to continue forecasting stagnating sales numbers while other prestigious firms disagree. Sucharita Mulpuru of Forrester Research states, “Online retail is years away from reaching a point of saturation.”  One indicator of a maturing market is its profitability.  Expenses and revenue are both facts of online business life.   More than eight out of 10 survey participants reported profitability. Three out of four are more profitable than they were in 2005.  Retailers who offer quality customers channel choice appear to be in the best position to benefit in 2007.

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