Interactive Goes Big

Posted on by Chief Marketer Staff

In 2009 the Chief Marketer Interactive Survey showed marketers deciding to follow online audiences into social networks, where the branding effects were strong but the return on investment sketchy.

Never mind the ROI. If last year’s respondents were baiting a hook to “fish where the fish are,” in 2010 they’re chartering party boats and using long-line nets. The current survey shows a strong increase in marketer involvement with social networks, smartphone apps and the round-the-clock updates of Twitter.

As it did last year, e-mail messaging and newsletters lead the roster of interactive marketing channels employed by respondents to the 2010 survey. But this year social networks come on strong, with 58.3% saying they market through off-site communities such as Facebook, YouTube and MySpace. While results can’t be reliably tracked with 2009 because of changes in our survey format, this social marketing contingent undoubtedly represents a large increase over the 34.3% of last year’s response group that said they were promoting their brands in social nets.

And that doesn’t take into account the percentage (24%) who are marketing through social communities built on their own sites — not large enough to make it into the top-10 interactive channels for 2010, but still considerable. And the two social-marketing response groups together seem to make it official: Brands are listening to their customers and encouraging their fans to speak their piece.

Beyond the Profile Page

Marketers this year showed strong interest in putting their campaigns into the social sphere in various ways. For example, while 44.9% of marketers said they use display ads on the Web, about half that number (22.4%) said they run such ads in social-network pages. And almost as many (21.6%) reported that their departments regularly reach out to bloggers to further their campaigns. Only 10.8% said they have built applications or widgets for social networks, however.

Other interactive channels that came in below the top 10 mark in this year’s poll include viral campaigns (26.3%), text messaging (14.4%), online coupons (13.2%), corporate blogs (6.7%) and mobile coupons (6.6%).

Low cost may be one factor leading so many marketers into social media — or at least one benefit of such programs. Asked to select the three channels that accounted for most of their budget last year, half of respondents (50.2%) cited e-mail messaging campaigns, and two out of five pointed to e-mail newsletters. Paid search, search engine optimization and Web display ads were all named by about a quarter of respondents. By comparison, only 12.7% said off-site social media marketing was among their top-three expenditures last year.

But social media is also valued for the way it serves the strategic aims that marketers most commonly want to accomplish through interactive marketing: predominantly, to build their brands (72.4% of all respondents) and shore up loyalty among their customers (62.6%). Asked to name the three main goals for their interactive campaigns, marketers cited both of those purposes somewhat more frequently than driving traffic to a Web site (60.3%), generating direct sales (59.5%), gathering leads (57.8%), or getting consumers to opt in to e-mail (54.3%).

Next Page: Old-School Metrics

Old-School Metrics

When it comes to metrics, however, marketers appear to fall back on the performance yardsticks that have measured online success in the past. About 60% say they rely on clickthroughs to tell them how their digital campaigns are doing, making that the most prevalent metric, as it was in last year’s survey. Lead generation, response rates and incremental sales also figured large in this year’s online toolkit — just as they did in 2009, and in approximately the same proportions.

Interestingly, return on investment was named as a key performance indicator by only 38.4% of those polled — just barely above the 35.2% who named ROI as a top metric last year. And 4% of this year’s response group said they are not measuring the effectiveness of their interactive marketing, compared to 2.5% who said the same last year.

Notwithstanding that relative inattention to ROI, marketers told us that they are as convinced now as they have been that interactive marketing is a cost-efficient use of their budgets. Last year, 34% said IM was “more profitable” in ROI than traditional marketing channels; this year, 34.9% said the same. The 2010 survey found 8.4% of marketers saying that the ROI from interactive was “less profitable” than that of traditional marketing (compared to 7.4% who said the same last year).

But as in previous years, a large proportion of those polled this year (25.3%) said they simply “do not know” whether interactive campaigns produce a better or worse investment return. Combined with the 13.1% who said they “do not measure” ROI for interactive campaigns, that represents a large proportion of marketing being done in the dark, so to speak.

New Dollars

Tallying with several analyst forecasts that predict higher interactive spending in 2010, more than half of respondents (51.5%) said they will spend more on digital marketing this year than in 2009. That’s appreciably larger than the 42.6% who predicted increased budget for interactive marketing in last year’s survey. Another 32.8% said their spending will hold level with last year (compared to 27% in the 2009 survey). And the 7.4% predicting a drop in interactive budgets this year is just over half the proportion (13.9%) who foresaw cutbacks the last time. Marketers are ready to spend on the Internet.

Where will those new funds come from? For many respondents, from new infusions of resources for marketing, apparently. The proportion of marketers who say they will get new dollars from either an increase in specific interactive budgets (14.5%) or as part of an overall lift in their department’s funding (14.7%) is two-to three-times the group who were looking forward to bigger budgets in 2009.

Still, the number of marketers who say they’re expecting budget increases is smaller than the percentage that will shift budgets from spending on traditional media. But for the first time, this year’s survey found a slight decline in budget-shifting from either mass media or other offline marketing. That might indicate that marketers have hit a wall in these reallocations, and the media mix is approaching a proper balance.

A Closer Look

As it did last year, the 2010 survey zeroed in on some specific interactive channels to gauge marketers’ current and near-future involvement. In social networks, respondents cited a much higher use of Facebook marketing than in 2009 (58.1%), and more than half reported actively marketing on professional network LinkedIn — which was not part of last year’s survey. MySpace, however, showed a notable falloff in marketer activity.

While the number of respondents who reported aiming campaigns at smartphones was down slightly from last year, a larger proportion than last year said they will roll out such campaigns in 2010.

But the big news is the jump in Twitter marketing from last year: an amazing increase of almost 30 percentage points, to 39.1%. That’s almost as large as the contingent who said last year that they had “no plans” to get active on Twitter in the near future.

If the 14.9% who say they will start marketing on Twitter this year follow through on that plan, that will mean more than half of all marketers are actively using the microblogging platform. Not bad for a channel that most marketers still say they can’t measure effectively.

A fuller discussion of the results of this year’s survey can be found on the Chief Marketer Web site at https://chiefmarketer.com/research/ (registration required).

METHODOLOGY:

The 2010 Chief Marketer Interactive Survey was conducted online March 2-16, 2010, and polled 500 respondents actively involved in marketing, distributed across both business-to-consumer and business-to-business models and including firms in the manufacturing, retail, financial, healthcare, travel, entertainment, advertising, publisher, consumer database and nonprofit sectors. More results can be found at https://chiefmarketer.com/research/ (registration required).

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