by Renee Sande

Created on: December 26, 2007   Last Updated: December 28, 2007

When 66 percent of the world's fastest-growing companies state that social media is either "very important" or "somewhat important" to their overall marketing strategy, you can bet they know what they're talking about. Internet advertising and access spending are expected to be the biggest industry growth engine over the next five years, with a 13.4 percent compound annual growth rate (CAGR) from an estimated $177 billion in 2006 to $332 billion in 2011.

So why is Social Media Marketing the rock star of the advertising market today? "Social Media Marketing is not just a tool but a movement," says Ryan Mathews, founder and CEO of Black Monk Consulting, a company offering the latest in global consumer trends, technology, innovation and retailing. "a kind of sea change in the way people relate to the world, in a way I believe will gain increasing significance."

Especially of significance is the projection that U.S. spending on Internet advertising and access will surpass advertising dollars spent on newspapers in 2009. According to Citigroup Investment Research, newspapers have been and will continue to be the hardest hit. Statistics from 2004-2007 showed a loss of $890 million annually to the Internet. In direct correlation with these figures is the recent increase in the expense of nationwide delivery and newsstand prices of even the big boys of the newspaper industry such as the New York Times, Wall Street Journal, and the Journal Register.

Although The Journal Register Co. lost total revenue at 5.1 percent and advertising revenue at 6.9 percent in the first quarter, the company found strong gains in their online revenues, growing by 25.8 percent. Chairman and CEO Robert Jelenic referred to the first quarter as a reflection of the company's progress in its plan to "operate our business more profitably even as we remain challenged by a difficult print advertising environment."

One of the strongest footholds social media marketing has is the ability to remain strong even when consumer spending is down. Internet marketing will remain powerful even as total media dollars will decline, for two reasons: 1) In tough times, marketers will increasingly look to more measurable media to make sure their spending is as efficient as possible, and 2) as consumer spending falls, consumers will increasingly use the Internet for research and shopping in order to maximize their dollar.

As companies realize the increasing benefits of marketing with social media, they will continue to shift their advertising dollars away from traditional print media. So as marketers explore new ways to capture consumer attention online, neighborhood paperboys around the country will be online looking for new jobs.

Resources: hollywoodreporter.com, mediaconnection.com, mediabuyerplanner.com, sky-searchplacement.com

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