Under pressure to make every marketing dollar count in this recession, marketers are gravitating to channels that offer measurability, accountability and a sound return on investment. And very often, that means heading online, even if they have to shift dollars from offline channels.
There’s only one problem. Their consumers are flocking to parts of the Web where the metrics are still pretty shaky and the ROI can be hard to demonstrate — social networks, blogs, word-of-mouth campaigns, video and text-messaging.
What’s a marketer to do? For at least some, the answer is to fish where the fish are, budget constraints or not.
According to the 2009 Promo Interactive Marketing Survey of brands and agencies, growing numbers of marketers say they will make use this year of interactive channels that are more likely to have an effect on brand identity than to drive provable incremental sales to the bottom line.
That’s notable in this marketing climate, because forecasters have predicted online marketers will pull back from media they deem “experimental” and funnel their scarce resources into tried-and-true online tactics that can be linked, with the proper tracking, to sales increases or other conversions, or at least to hard-edged metrics such as mail opens or clickthroughs.
And in fact, respondents to this year’s Promo IM poll said they’re holding steady on, or making moderate increases in, their use of those “hard numbers” Internet channels. Just over 74% said they will use e-mail marketing this year, a rate very comparable to reporting in 2008 and 2007. The number of respondents sending out e-mail newsletters is up about seven percentage points from last year, to 70.5%. Users of online display ads have bounced back a bit from the popularity dip they saw last year to almost 41% of those surveyed. And online promotions, search optimization, paid search ads and Web-based contests all remained basically at par with their 2008 levels.
For the big jumps in Internet usage, you have to look at the relative newcomers to this year’s IM survey. For example, 38.6% of respondents said they will market online through at least one corporate blog this year, up from only 22.8% who did so in 2007, and up more than 11 percentage points from last year.
Promotions in social networks of any description are also set to pick up steam this year. For the previous two years, fewer than one in five respondents told Promo they would make social nets part of their media mix. This year, more than one-third of those polled said their companies or agencies would use those Web communities in their marketing — an increase of more than 100%.
Apparently, the lack of a clear through-line from winning friends on Facebook to ringing sales at the checkout isn’t deterring some marketers from inserting themselves into the social conversation online.
As one respondent said in a write-in comment to this year’s survey (an anonymous way some of those polled chose to add texture to their answers): “This is a time for reinvention of brands, both business and personal, and for thinking outside the box.”
And while those new media methods have a long way to go to depose e-mail as the top interactive channel, they’re within short hailing distance of some of those other “old school” IM methods. Almost as many respondents said they will operate corporate blogs this year as said they will buy display ads or optimize to turn up in organic searches. And to judge from the 2009 IM survey, viral campaigns and mobile marketing are about as widespread as pay-per-click ads or Web-based contests.
FOR MANY, ROI STILL A MYSTERY
Why this expansion into the social side of the Internet at a time when marketers are supposedly being pressured to lock down budgets and explain every expenditure’s contribution to the bottom line? Obviously, the audiences are headed to those parts of the Web; a March Nielsen report found that logging on to social networks is now the number-one online activity, beating out checking e-mail. But that still doesn’t mean that marketers, in a supposedly ROI-obsessed age, will spend money to reach them there.
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Adopting new-media tactics could be compulsory, of course, for advertisers trying to reach a specific target consumer. Teens and young adults will expect their favorite brands to follow them around the Web. Other marketers might be looking to learn more about how to use these new channels, socking away expertise that can give them an edge when budgets loosen up.
And social networking campaigns can actually be assembled for relatively low cost, as one respondent to this year’s survey notes: “Social networking is a focus for us right now. We are a lean organization and looking for alternatives that we can manage (manpower-wise) and not spend a huge investment.”
But as it has in past years, the 2009 Promo Interactive Survey suggests one additional reason why marketers may be willing to take a chance on hard-to-measure media: a surprising number of them say they don’t know what kind of ROI they’re getting from any of their interactive channels.
More than one-third of respondents to this year’s poll (37.7%) said they either “do not know” or “do not measure” to see how the ROI from interactive marketing compares to that in traditional channels. While those “know-nothings” are a smaller proportion of the response than they were last year, when almost half of respondents said they didn’t have the information to compare online ROI to offline, it’s still a surprisingly large contingent confused about cost-effectiveness.
That’s too bad, because the proportion of respondents who say the ROI from interactive marketing beats that from traditional channels is at an all-time high in this survey: 34%, with another 13.9% reporting that both online and offline are equally profitable.
“As budgets are cut, focus increases on interactive because it’s cost-effective,” one anonymous respondent wrote.
But in the words of another, “[The interactive industry is] moving at a record pace, but who is tracking the results?”
WAYS AND MEANS
Related to cost-effectiveness is the specific effect interactive marketers are hoping for from those costs. Like last year, when asked to check off all the reasons they did interactive marketing, respondents cited “building brand” as their top strategic aim online (73.7%), with “drive Web traffic” in second place (68.4%) and “build loyalty”at third (63.2%).
Interestingly, “generate sales,” the fourth most common answer last year, dropped into fifth position (53.4%), outpaced this year by “build e-mail list” (59.5%). It’s a small shift but perhaps an early indicator that the Web is being valued more for continuing conversations with brand fans than for closing sales.
As for where they’re finding the budget for their interactive campaigns this year, results largely track with past Promo surveys. The large majority of respondents say their online budgets, at least, are uncharged this year. Of those who report an increase, the largest proportion (about one in five respondents) say the new funds are coming from budgets that would have been spent on traditional offline media such as TV, radio and print. That’s a bit larger than last year’s 17.8%.
Another 6.6% told Promo they were moving money from traditional promotion channels such as free-standing inserts or offline sweepstakes into interactive campaigns this year, while 4.5% said they would dip into funds previously allotted for B-to-B marketing.
But last year, almost 9% of respondents said their interactive spending would increase as part of an overall increase in their 2008 marketing budgets; another near 9% said online spending would go up even though the overall spend would decrease. For this year’s survey, only 5.8% said they will boost interactive spending while keeping the rest of the budget stable. And only a lucky 7% said that an increase in online marketing spend this year would be part of an overall boost in their marketing budgets.
In fact, among write-in comments to the survey, “budgets” were mentioned as the key challenge to interactive marketing this year more often than any other factor. (That includes “cash” and “money” as one-word answers, and one plaintive use of “$”.)
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THE NEW MEDIA WAVE
When it comes to the new interactive channels that have gotten so much press in the last year, respondents showed much more interest in some media than in others.
As noted above, about one-third of respondents said they plan to run social campaigns in 2009. Chances are good they’ll be looking at Facebook as a platform, because that network had the highest number of respondents as active brand members: more than 38% of those polled, compared to about 22% with a MySpace presence and 29.9% on other social networks.
And one-quarter of those asked said that while their companies had no current presence in social networks, they are considering establishing one this year. Only 17.6% said they would continue to do without any social network profile at all in 2009.
Marketers were equally taken with advertising on Web-enabled smartphones. About 13.3% said they ran a smartphone campaign last year and would do so again; another 24.6% said they were planning their first one in 2009.
Microblog platform Twitter, however, still has few brand friends. Only about 26% of respondents either have a Twitter account or plan one for 2009.
The survey was conducted by Penton Research and mailed in February 2009 to 15,585 subscribers to Promo and the Promo Interactive newsletter. Results are based on surveys returned by 254 qualified participants and conform to accepted marketng research methods, practices and procedures.