Consumer Debt
David Fishman
Through the internet
boom and bust the US consumer debt levels have increased to staggering levels.
According to the AARP consumer debt grew at alarming levels during the internet
bubble years prior to the bust. Allowing for companies focused on this market
to grow whether they were focused on debt consolidation, pay day loans, cash
advance programs, all found room in this consumer “help” space
and most of them built internet based consumer applications. Even the once
stable and exceptionally profitable mortgage and refinancing verticals were
saturated with thousands of companies since the demand had grown so high. As
internet marketers we created no barrier to entry for these companies. Often
we allowed these companies to simply call up, and we would help them touch
one million consumers for less than the price of a bad vacation. Lets take a
peak at the facts so we can understand why this is such a profitable space
for advertisers and media providers.
For a few facts
and figures, lets review the US consumer debt. “ US
consumer debt has reached staggering levels after more than doubling over the
past 10 years. According to the last years figures from the Federal Reserve
Board, consumer debt hit $1.98 trillion in October 2003, up from $1.5 trillion
three years ago. This figure, representing credit card and car loan debt, but
excluding mortgages, translates into approximately $18,700 per US household.”1
If we include mortgage debts we are near $9 trillion total for consumer debt.
With so many homes in deep debt it is easy to see why advertising for these
companies is a profitable opportunity. However the consumer and general American
has been hit hard not only by debt but often by job loss which attributes to
the debt problems.
Job losses are a serious problem that threatens to destabilize some of the
foundations of the social and economic fabric that create the US economy. A
positive of the internet bust was that most of the companies left in the consumer
credit and financial space are reputable and truly interested in helping all
consumers dig out of personal debt. With a majority of reputable companies
working in this space the advertisers opportunity to capitalize on this market
becomes more tasteful.
Internet advertising and media firms can easily capitalize on these trends
by working closely with debt companies on campaigns that will help consumers
find themselves debt free after a few years. It is very difficult for any company
to help consumers pull out of debt if they do not have a source of income.
The current recession has hurt the job market and as we discussed previously
some attribute this to the outsourcing of jobs. Internet advertising may be
one of the few industries that is growing and hiring at high rates every month.
Internet advertising
will need to find the “right companies” in
the consumer debt market to work with since they all offer the same benefits
to the consumer. One of the challenges for the advertiser is to come up with
creative ways to market these products. All of the companies offer the same
value to the consumer; the question is, how do we as internet marketers find
the most suitable company for the type of media we want to focus our energies
on.
We certainly can help the US economy by producing jobs, but sometimes we can
also help by finding campaigns and companies that can help millions of Americans
solve problems that are agonizing to face on a daily basis.
- http://research.aarp.org/econ/dd70_debt.html
- http://www.washingtonpost.com/ac2/wp-dyn/A10011-2004Jan12?language=printer
- http://www.wsws.org/articles/2004/jan2004/debt-j15.shtml
