Economic slowdown will accelerate online shift

Economic slowdown will accelerate online shift

Story posted: March 24, 2008 - 6:01 am EDT (B2B)

Welcome to BtoB's 2008 Interactive Marketing Guide. Our annual
publication offers sections on e-mail, search, Web sites, online
advertising, online events, b-to-b media sites, social media,
interactive agencies, analytics and multimedia.

In addition to overviews of the various topics, the guide provides tips,
expert interviews and sidebars with useful resources and data. You'll
also find updated vendor lists and data charts.

Just like last year, marketers can pick from a slew of interactive
channels for reaching their customers and prospects. And just like a
year ago, there are analytical tools for measuring how these channels
perform, both individually and in concert.

What's different this year is the weak state of the U.S. economy. How
will this reality affect marketers' choices?

Dark economic clouds will, in fact, accelerate the shift to digital away
from traditional media, notably print, as marketers scale back budgets
and seek granular, measurable media. This was the exact finding in
BtoB's exclusive survey of 684 b-to-b marketers, conducted during the
last week of January and the first week of February.

Of the 29.4% of respondents who said they have revised original 2008
marketing budgets, nearly half (45.3%) said print will see the greatest
decline.

Unfortunately, the unintended consequence of this movement out of print
advertising is that it will put marketers' media partners, whose online
portals and audiences they correctly value, in a bad place. That's
because the revenue models of most media companies continue to be skewed
toward their legacy print products.

Regarding online channels, research from eMarketer-our data partner in
this guide-provides the following insights:

Search continues to be the prime format, in terms of dollars spent ($8.6
billion in 2007 and expected to hit $11 billion this year) and as a
percent of total online ad spending (40%).

However, two formats beat search in terms of spending growth: Rich
media/video will increase 48.9% from 2007, and lead generation, or
referrals, will increase 30.9%. Search, by comparison, will grow 27.5%,
according to eMarketer.

Online video is an especially interesting category, in part because the
cost of entry is so much lower than traditional broadcast efforts, a
fact that has and will spur adoption by companies that never had a video
strategy in the past. U.S. online video advertising spending this year
will increase 74.2% from 2007, the watershed year for video growth
(89%), according to eMarketer.

In this guide's section on online advertising (page 26) Andreas
Combuechen, CEO-chief creative officer of Atmosphere BBDO New York
summarizes video's virtue this way: "Video is a particularly compelling
way to tell a brand or product story and can be very useful for b-to-b
communications, as these businesses tend to be more complex and can
require additional explanation."

Overall, marketing spending on the Internet continues its rise.
According to eMarketer, online ad spending is expected to reach $25.8
billion, up 23% over last year.

Ellis Booker is editor of BtoB and BtoB's Media Business. He can be
reached at ebooker@crain.com.