Good News In Bad Times For Digital Marketing

Posted by

65% of Chief Marketing Officers and marketing executives said that because of the troubled economy more of their money will go toward digital/interactive marketing than before.

In the same breath, 59% reported a decrease in their traditional advertising spend.

“In this economic climate, marketing executives are seeking accountability and measurable results,” said Mike Iaccarino, CEO of Epsilon. "Data-driven marketing is an increasingly important component of corporate marketing campaigns as senior marketers employ sophisticated segmentation strategies to recruit and retain customers.”

All of this taken from the recently released, CMO Survey by Epsilon (PDF download). You can catch the top-level news byte from Marketing Charts here: Economy Shrinking 65% of CMO Ad Budgets, Money Shifts Toward Digital. As opposed to yesterday’s Blog posting, You Are Expected To Have A Social Media Presence, this survey was done in August 2008 and included 175 US CMOs and marketing executives "of some of the largest brands in the nation. Some 27% of respondents work at companies with $10 billion or more in annual revenues last year."

When General Motors made the announcement earlier in the year that they would be shifting half of their three billion dollar advertising budget online, many advertising pundits felt it was an act of trying to get "more bang for the buck." When, in reality, GM had done their homework and learned that people were now making the final purchase decision for an automobile online. To further validate this, a senior Ford marketing executive recently told me that they don’t call them "test drives" anymore. They’re called "confirmation drives." More and more people are going well beyond basic online research when looking at purchasing a new vehicle.

Reading posts on the economy and how it will affect marketing is almost as depressing as watching Wall Street. Digital Marketing could well be one of the main industries that will benefit from this downturn, and when things turnaround (they always do), we can all be hopeful that Digital Marketing will lead the brand and advertising strategy. While Iaccarino from Epsilon points to "accountability and measurable results" as the driving force, Marketers tend to be into trying newer channels as well – perhaps in hopes of finding more ROI.

More from the CMO Survey:

– Social computing (including word of mouth, social networking sites, viral advertising, etc.) was the most popular emerging channel with 42% of marketing executives expressing interest in adding it to their marketing mix.

– Blogs were the second-most-popular emerging channel, with 35% of marketers expressing desire to use them and 19% already using them.

– Almost one-third of CMOs mentioned podcasting as an area of interest, with 31% interested in adding it to their marketing mix and 18% already having done so.

– 29% are interested in Mobile Devices (phones/PDAs) and 22% have added them to their marketing mix.

Overall, it’s a silver lining for a very dark cloud cluster… one that doesn’t seem to be going away anytime soon (bailout or not).

Here’s the bigger question:

If advertising dollars do shift to the Digital Marketing channel, do you think that it will stay that way when the economy turns around?


  1. I suppose it depends how long the economic crisis lasts…if companies start to see a real payoff in this space, then they might continue on that track even after the economy recovers.
    The economic crisis in front of us is very real and very unfortunate…however, it’s up to us as entrepreneurs to find those “silver linings” and position ourselves in front of the opportunities that come out of the adversity. Otherwise we run the risk of sinking with the ship.
    Thanks for sharing this critical information!

  2. Absolutely those dollars will stick around. Clients are going to get addicted to the measurability and targeting capabilities. The only exception will be when clients and their agencies try to use digital with traditional thinking (a barrage of untargeted banners ads for instance).
    Great post!

  3. This is like the housing boom. As a digital marketer, I can’t stand the fact that integrated thinking is giving way to interactive marketing because it’s measurable and “cost-effective”. What rules the day are insights, strategies, and ideas that aren’t digital, but just plain smart.

  4. and this is happening at the same time s the move towards mobile. The first time one of these ceo’s walks down the street and his new phone bleeps with a message they will really get it. ‘hey you are opposite marios restaurant, and its lunchtime, quote 12345 for 20% discount and a free drink

  5. I second Dave Nourse’s comments. If the digital marketing being used is merely the traditional banner ads then there is no way the advertising dollars will remain in pockets after the economic crisis ends. But if marketers take the time and the money given to them to come up with creative, innovative digital ideas then it could break grounds for some very cool new stuff.
    Also I have a feeling more and more marketers will be “joining the conversation” as blogging and social networking become more popular due to the low to nil cost of them. But if this happens could it taint the conversation and ruin it by forcing too many in your face marketing efforts?

  6. I think the potential of a shift back to “traditional” media after the economic crisis passes depends on one thing.
    If we help our companies/clients/friends/family get involved in new media, new marketing, new everything we can keep them there…but we have to do it right.
    I think there will be numerous companies moving to digital in the slowdown simply because it’s “cheaper.” This has the potential to put out some TERRIBLE digital marketing and decrease the perceived effectiveness for many people.
    I think it will be critical for those of us who have been swimming in this fishbowl to not only show our companies/clients where the fishbowl is, but to also teach them how to swim. It is up to us to make sure that the transition is smooth and successful. That’s what will keep people there.
    I’m sure that some people will assume that the shift to digital had nothing to do with the recovery (when we look back from the other side) and that the recovery was just a natural market effect. Those people may just shift back to the old way of doing things when the money is there. There’s not much we can do there.
    The real opportunity is to show people that there is a more affordable and effective way to market and use the economic conditions as an “excuse” for them to try. Then, through consistent demonstration of success and effectiveness we can keep them swimming in our fishbowl for years to come.

  7. Digital is not the only area that is growing; however it is receiving the lionshare of the growth – and rightfully so. It allows for boundless interaction; it is always on; it is inexpensively and immediately adaptable; and it rarely requires the same contractual rigidity that many of the traditional media peddlers push.
    Companies are moving away from traditional advertising media into all types of alternative and high ROI niche marketing categories.
    The Advertising Specialty Institute reports that the promotional products industry experienced a 3.7% growth rate in 2Q 2008, so the shift isn’t just into digital, but into other alternatives as well and is definitely away from broadcast and print.
    I am seeing strength in experiential marketing, re-marketing, mobile marketing, game marketing, promotional marketing as well as all of the digital variants.

  8. The economic downturn may be the final impetus to push dollars digital’s way, but it is not the only one. It’s not even the most compelling when you consider the growth of: user generated content; social mediums; general understanding of marketing forces by “non-marketers” and their subsequent railing against traditional mediums.
    To put it bluntly, the economic downturn is just helping remove the final excuse traditional stalwarts had for resisting the new realities of marketing. And I think once the dollars are repositioned and metrics are counted, it will be very hard for those stalwarts to move them back.
    jl (

Comments are closed.