Marketers Moving to Digital

UncleSamCash.jpgSome 70% of US marketers will shift part of their budget from traditional to digital media in 2009, and a majority are also turning to promotions rather than building brands, the ANA and Marketing Management Analytics have found.

Based on a survey of 95 senior marketers, which was conducted by mktg, the ANA reported that 75% of participants will reduce their overall expenditure this year.

Furthermore, 67% of the panel had either seen their annual sales targets remain constant or increase when compared with 2008, despite the fact they now had fewer resources at their disposal.

A third of the sample predicted spending levels would be unchanged in 2010, while 36% forecast an increase, including 12% expecting an uptick of over 10%, and 14% said their outlay would fall by a similar degree.

One area witnessing an increased amount of activity has been the formation of multi-disciplinary teams, with 32% of the sample working regularly with members of their finance and research-focused colleagues, up 10% year-on-year.

Similarly, 38% of contributors have adopted the same metrics as their finance departments – up 11% on an annual basis – while 20% argued they now made strategy with their counterparts in this area.

Marketers are also using more detailed analytical tools, with 17% employing “what if” scenarios to estimate the impact on sales of changing their adspend, up from 8% last year.

A further 43% are building “customer lifetime models”, an improvement of 16%, while 19% were developing predictive sales models, almost double the total from 2008.

More broadly, 53% of industry specialists were diverting resources away from brand building and towards promotions, while 38% are turning to “lower-cost media”, such as shorter TV spots.

A total of 46% of respondents were “satisfied” with the return on investment, including sales, derived from marketing, while 34% were happy with their agency’s measurement processes.

However, just 28% felt they could respond flexibly where certain channels were not delivering the desired ROI, and only 20% were confident in their ability to predict how marketing will impact sales.

Finally, 43% of senior managers taking part in the study regarded marketing as being an investment in brand equity, compared with 39% who described it simply as an “expense”.

Printed with Permission from World Advertising Research Center

Data sourced from ANA; additional content by WARC staff, 15 September 2009

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