A Message from M9 to All of You!

Merry Christmas, Happy Holidays and we wish you a Great New Year!

From,

Roger, Bo, Ian, Aaron and Michael

Normally one of the first things that are cut during a recession is a business's advertising budget. For example, between 2000 and 2002 (the dotcom crash), online advertising in the United States alone fell by 27%.

However the internet has changed considerably since then. Right now most businesses are seeing internet advertising as a cost of sales. And some see advertising as an extra return on investment for something they'd have to have anyway.

That attitude means that many companies are increasing their internet advertising budget because it brings sales at a relatively low cost.

For example:

• In the United States, currently experiencing a catastrophic financial meltdown, a recent report by eMarketer revealed that online advertising spending will increase by 8.9% in 2009
• In Canada a report by Price Waterhouse Cooper, indicates that the internet advertising market will expand by at least 19.8% each year

The reason the budgets are increasing is because modern internet advertising can increase both brand awareness and consideration while appealing to customer preference, all at the same time.

That flexibility means that internet advertising can be extremely effective!

The Changing Face of Advertising

According to eMarketer the amount of money spent on online advertising in the United States increased by 21.4% in the category of search (such as the M9 search engine optimizing Content Generation Solution and Optimization of Website Sub-Structure Solution) and 11.3% in the category of e-mail (such as the M9 Client Subscription Solution) in 2008.

Over the same period the money declined by 7.2% in the category of sponsorships and 5.5% in the category of classifieds.

Basically the old ways of advertising on the internet

In October the unemployment rate went up by 0.1% to 6.2% across Canada. However, according to Stats Can records (Statistics Canada at http://www.statcan.ca/menu-en.htm); the nation

In 2007 Canadians used the internet to purchase $12.8 billion worth of goods and services, a 61% cash value increase since 2005.

According to Statistics Canada the volume of orders rose from 49.4 million to 69.9 million over the same period in 2005 with 52% of the orders being placed with Canadian vendors.

In total more than 8.4 million Canadians made an online purchase in 2007 (out of the estimated 19 million internet users), up by 1.5 million from 2005 (when there were almost 17 million users).

Additionally 82% paid online directly compared to 75% in 2005 and in 2007 the value of their average purchase increased by $23.00 to $183.00.

The Biggest Concern

The biggest concern of consumers online was about the security of their credit cards. In total 50% of all Canadians (online and not online) were concerned about online credit card use. The percentage dropped to 34% of those who had actually made an online order.

That indicates that the more Canadians use the internet the more comfortable they are using the internet.

Some of the most common purchases included travel services, books, entertainment products and clothing. When the average age of the majority of internet shoppers (25-34) is considered, this makes sense as the purchasing fits in exactly with their normal practices.

"Window Shopping" in the Internet Age

For many Canadians the internet is used to supplement traditional shopping practices by allowing extensive research to be done quickly and easily. In 2007 43% of Canadians researched a product on the internet and 64% then made a purchase from a brick and mortar store.

Some of the most popular items researched include clothing, electronics and house wares of all types.