Features and tRends

(April 2009)

How to Best Invest in Digital Marketing

By Lyndsey Forster and Melinda Wong


Whirring. Running. Fast-paced. These adjectives all may sound like a description of a foot race. They can also be used to best illustrate the rapidly evolving world of digital media. Many marketers are experiencing challenges navigating these new waters because they may not understand fully how to best engage in this non-traditional medium or truly appreciate its ability to provide a high marketing return on investment.

As a business leader, it’s vital to remember that digital marketing is a specialized medium through which to market, and it should be deployed as well as budgeted in a complement to a brand’s integrated marketing campaign.

The Demise of Traditional Media

Conventional newsrooms are shrinking. Legendary print newspapers like the Seattle Post-Intelligencer and Rocky Mountain News now fail to exist while “other papers, both large and small, are teetering on the brink of bankruptcy.” The reason? Unrewarded traditional advertising investments. And where are those dollars going? Online. In the next few years, the shift to online media buying will grow even faster than most initial predictions.

According to a 2009 forecast by Kelsey Group, the interactive segment will likely expand from a $14 billion market in 2008 to over $32 billion by 2013. In turn, the traditional media segment is slated to decrease from $141.3 billion in 2008 to less than $113 billion by 2013.

US Local Ad Spending Forecast (Billion Dollars)

Digital Media

Traditional Media

Year

Spend

Share

Spend

Share

2008

$14.0

9.0%

$141.3

91.0%

2009

16.3

11.5

125.1

88.5

2010

18.9

13.9

116.9

86.1

2011

22.9

16.7

114.0

83.3

2012

27.2

19.3

80.7

113.6

2013

32.1

22.2

77.8

112.4

Source: Kelsey Group (Mktg Charts), February 2009

In today’s economic climate, budgets are being reallocated in dramatic fashion. While some businesses view dedicating marketing investment towards digital media exploratory, when deployed correctly, digital marketing can be just as—if not more—effective than traditional print or broadcast media. By allowing customers to interact online, these audiences have the potential to become much more engaged and oftentimes can play a more intricate role in product and/or service development.

Why should your brand continue to invest a larger share in digital media? According to InStat, “by 2006, broadband audiences reached over 56 million in the U.S. alone, and more than 200 million worldwide, with growth rates forecasted at nearly 20 percent per year.” Forrester Research found that three in four of U.S. adults who are online now use social media tools to connect with each other, compared to just 56 percent in 2007. What’s more, Netpop—a marketing research firm—reported that social networking has grown a full 93 percent since only 2006!

The Value of Digital Marketing

Digital media, specifically social media, offers the ability to strategically target like never before. Demographics and psychographics are readily available from the big players like Google, Yahoo and Facebook. Similar to traditional printed direct mail campaigns where you can target a geographic area as well as income level, social media now provides you with the unique ability to align your brand with specific personality traits.

According to 24/7 Real Media and Mindset Media, digital marketing companies in collaboration with one another, have developed the ability for advertisers to reach their audiences based on 20 different personality types, “including creativity, assertiveness, self-esteem, and spontaneity.”

Most importantly, when targeting audience members online, your message appears in a less cluttered environment than it does in traditional print publications. On a computer screen, one user may experience three to four highly relevant ads, in contrast to a magazine where they may have seen upwards of 70.

Dive Into the Digital World

How can you expect to get the most out of a digital program? This is a comprehensive undertaking which can require dedicated staff or an agency to achieve solid results and continual program optimization. As such, the evolving digital landscape can be daunting. It is a low-dollar investment yet a very labor-intensive process. There are numerous options to consider including launching Web and micro-sites, creating and placing to banner ads or developing a social media campaign. And it certainly doesn’t stop there as mobile advertising, which is just now scratching the surface, can range from providing branded widgets/applications to instant incentives that can be redeemed at point of purchase.

To begin, a dedicated digital media budget should be established. A portion of this investment may be allocated towards funding resources, which can range from the cost of employing a marketing agency, to consultants or allocated staffing. In either event, a discipline is recommended to manage the large task of social media participation, monitoring and creating content, deploying media buys, organic as well as pay-per-click campaigns/search engine marketing and online video.As the digital race continues, please don’t stand on the sidelines and let your digital savvy competitors pass you by. Get out there and claim your spot in the front of a very cost effective and highly accountable investment.

For more information about K&A’s social media accelerator program or what K&A can do to establish and solidify your online presence, contact Steven Kleber at skleber@kleberandassociates.com or 770.518.1000 x203

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