B2B Web Strategy Blog – eMagine » Marketing spending – especially online

Marketing spending – especially online – holding up quite well, thanks

December 9th, 2008 Posted by: Bill Gadless

We were pleased – OK, actually thrilled – to come across a couple of recent data points indicating real strength in online marketing, despite all the economic dark clouds…

Item 1: From a quick poll of over 1,200 advertisers and agency execs (B2B and B2C) at the Association of National Advertisers annual conference in October…

34% said they were increasing their current marketing budgets or making no changes in response to the downturn, while a third said they’d be doing some reallocation; only a third were planning actual cuts.
Nearly 40% plan to increase marketing budgets in 2009, with 26% planning increases greater than 10% and 13% planning increases between 1% and 10%. Again, only a third plan to cut, with the rest remaining flat.

“This is much more bullish than expected,” said Bob Liodice, president of the ANA. “There could be a feeling that the downturn is a sharp slide of shorter-term duration and the economy might start to bounce back in the second half of next year.” Or it might reflect savvy marketers seeking to capture greater market share by investing robustly in an economic downturn …as we and many others have recommended.

(For more, see “Marketing budgets showing resilience” by Kate Maddox.)

Item 2: Despite the faltering economy, search marketing is holding up well, as marketers focus on tools that promise the strongest return on investment. According to a new study by interactive marketing analytics company Covario Inc., year-over-year growth in paid search in North America stood at 32% in the third quarter, in line with several other analyses and relatively unchanged from earlier in the year.

“We believe that search is not immune to macroeconomic forces, but we also believe it will have the least relative decline of the various marketing tools,” said Craig Macdonald, VP – Marketing and Product Management with Covario. “There’s less risk in spending money on search. It’s very measurable and the cheapest form of lead acquisition out there.” Echoed Dave Alampi, VP at enterprise software company Infor: “Because you can measure precisely your return on different Web marketing activities, you know what you’ll get in return and can dial it up or down.”

Forrester Research projects that paid search marketing will grow 26% this year, and that search budgets will remain stable through much of 2009. “Because of its inherent accountability, search offers a safe haven for marketers and advertisers who are pushed by the recession to meet some pretty aggressive goals,” said Evan Andrews, interactive marketing analyst with Forrester. “You can track every cent and every click. Search is comfort food for marketers.”

If search budgets remain relatively healthy, it will likely be at the expense of other forms of marketing outreach. “We’re seeing that traditional agencies are getting hit before digital agencies,” said Jeffrey Pruitt, president of SEMPO (the Search Engine Marketing Professional Organization). “Some advertisers are increasing spend because search is working.”

(For more, see “Search marketing remains strong” by Christopher Hosford.)

Your Web marketing consultants should be able to help you line up your company’s online marketing strategy with current conditions and capitalize on all the opportunities.

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