US Interactive Marketing Forecast, 2009 To 2014 for Interactive Marketing Professionals

by Shar VanBoskirk
This year, more marketers are shifting budget from traditional to interactive media rather than
supporting interactive efforts with new monies as they have in years past (see Figure 1).1 To explore the circumstances behind this trend, we surveyed 204 marketing executives from firms with more than 200 employees across multiple industries. We dug into their current and planned interactive marketing budgets and found that the following factors influence interactive planning:

· Poor economic conditions. The majority of marketers find that interactive tools are more
effective than traditional ones, especially in a recession. When faced with
budget cuts or the need for immediate sales, these marketers find that interactive tools are less
expensive, more measurable, and better for direct response than traditional media. For example,
Busch Entertainment — the theme parks arm of Anheuser-Busch Companies — is using
Facebook and iPhone applications to try to regenerate slumping theme park attendance.

· Increasingly interactive customer relationships. Empowered consumers today expect a
customized, interactive brand experience that goes way beyond a 30-second television spot or
two-dimensional print ad. Forty-two percent of online adults and 55% of online youth want to
engage with their favorite brands through social applications.3 HRB Digital’s H&R Block took
this to heart. It used Facebook, MySpace.com, Twitter, and YouTube to make tax preparation
accessible, even social, and to engage consumers with the brand throughout the year — not just
at tax time.

· More strategic marketing organizations. Although not yet universally involved in setting
business direction, marketing is gradually assuming more organizational leadership in part
because of its close connection to customers. More than 40% of marketers say that “marketing
is the strategic leader in their organization.” As part of this shift, CMOs will begin to buy their
own technology, prioritizing interactive solutions like campaign management, Web analytics,
and email marketing.

· Moribund print inventory. Consumer readership of newspapers and magazines has dropped 17% and 6%, respectively, since 2004 while offline publishers have struggled to translate their impression-based ad sales model into viable online business. The result? Publishing giants Hearst Communications and Condé Nast are closing magazines like CosmoGirl and Men’s Vogue while Gannett and The New York Times Company are restructuring and selling off physical assets. This leaves more advertisers disdaining print for interactive options: The Publishers Information Bureau reports that advertising revenue is down 20% for Q1 2009 compared with the same time period in 2008.

· Proof that interactive marketing works. At last, even laggard industries feel that they have enough experience and data to prove interactive marketing’s worth. Online display spending by telecom companies in Q1 2009 grew 50% over Q1 2008.8 Pleased with double-digit growth in applications, Cornell University’s business school, The Johnson School, is increasing its investment in interactive to between 60% and 70% of its overall marketing budget. Randy Allen, the associate dean for corporate relations explains why: “If we do [new media] strategically, we can target more effectively and do it more cost-effectively as well.”


As with past forecasts, this year we adjusted our scope and approach to best align with marketers’ increasing interactive maturity. We also adjusted our modeling process a bit — this year working with an internal team of dedicated forecasting experts — in order to standardize Forrester’s forecast methodology and ensure consistent outputs and forecast updates.10 As you consider this forecast against former ones, note that this one:

· Shows delayed adoption of emerging media. In 2007, we projected that adoption of online video would begin immediately with mobile marketing following by the end of 2009. Because of the recession, however, firms have been too resource-constrained to trial untested media. With the exception of creating social media assets — which 86% of marketers expect to do before the end of the year — adoption of emerging media is currently flat. Our new forecast projects that video and mobile spend will initiate in mid-2010 and early 2011, respectively, as marketers emerge from the recession.

· Shifts contextual ads out of search. Contextual ads — typically text ads bought on a keyword or category basis — historically have been rolled into the search budget because of their cost- per-click model. But as search programs increase in complexity and contextual ads start to
include more visual elements — like images or video — they are shifting more wholly to the
display budget.

· Rolls online video into display. In our last forecast, because of its newness and limited
availability, we sized online video spend based primarily on reported earnings from the few
publishers selling it. The present forecast still sizes online video as pre-roll, mid-roll, and post-
roll ads but does so based upon the number of available video impressions and as part of the
overall display advertising category. We do not include video production costs or costs to
maintain on-site video assets as these are not typically part of the interactive media budget.
· Includes only email marketing delivery. This year, we forecast growth in delivery of retention, acquisition, and transactional emails. To be as accurate as possible, we limited our email sizing to just the delivery and services included in the CPM paid to email service providers. In years past we also estimated spend on professional services like data integration, analytics, or creative. However, as email becomes more integrated with other channels, it is increasingly difficult to tell which part of the professional services spend is dedicated to email.

· Sizes only integrated social media campaigns and created social assets. This time, our social media forecast includes only money that changes hands for: 1) campaigns that are uniquely enabled by social media — like the McDonald’s Big Mac Chant-Off, which encouraged users to record and post their own versions of the Big Mac chant using tools created by MySpace.
com; and 2) the creation of social media assets that a marketer will own, like a proprietary blog,
community site, or downloadable widget. We include online ads on social networks in our
display ad category and do not size internal social media staffing costs.

· Breaks out mobile. Limited available mobile marketing data in 2007 led us to wrap mobile
into a larger “emerging media” bucket for our 2007 forecast. For this forecast, however, better
data is on hand. We looked at a variety of inputs — mobile handset sales, usage rates, available
inventory, and pricing — and projected expected mobile marketing adoption rates based on
current trends and adoption of analogous media in order to create a unique mobile marketing
model.

INTERACTIVE MARKETING SPEND WILL NEAR $55 BY 2014

Marketers are getting better at balancing channel investments with consumer media time.
Newspaper, magazine, and television share is down while Internet spend stands at 12% of overall
advertising — a percentage that will continue to grow as marketers shuffle dollars away from low- performing traditional media into more relevant interactive channels (see Figure 3). Our forecast examines the pace of the shift toward interactive marketing as a more substantial part
of the marketing mix. We expect search marketing, online display advertising, email marketing,
social media, and mobile marketing collectively to grow to nearly $55 billion by 2014 (see Figure 4).

Week 4: Social Media & Marketing

Below is a list of links to social media topics discussed in last night's class on social media and marketing:

• RSS Search Engines: Many people mistakenly refer to RSS search as "blog search." While it's true that many blogs offer RSS feeds (automatic feed creation is a feature of most blogging software), not all blogs have feeds. Furthermore, RSS can literally be used with just about any kind of web-based content. RSS fundamentally is a relatively simple specification that uses XML to organize and format web-based content in a standard way.
  
• Breaking Through: Do not adjust that dial! During this excellently executed advertisement, your YouTube browser window may start to tremble and shake and seemingly implode, but it's all just a part of the very clever campaign for Acciona, a sustainable development firm based in Spain. View Video Here. Set to the song “Pure Imagination” (made famous by Gene Wilder in Willy Wonka & The Chocolate Factory), the 80-second clip was the result of two months of labor by director Marcel Burgos for McCann Erickson Italia (we’re still not sure if we understand how he did it). Of course, it’s not just the novelty of the advert that makes it so fun and effective: Breaking through the old to make room for the new, it could not have done a better job of illustrating better solutions. Plus, the company chose not to use traditional media but to air Re exclusively online to fund its production costs—proving that every medium can stand for a little “re”-thinking.
• Ad Age: Brands on Twitter, 76% of Accounts Are Infrequent Users: Most companies fail to realize Twitter's full potential as a market engagement platform. While 73% of Fortune 100 companies registered a total of 540 Twitter accounts, effectiveness based on level of activity, interaction and engagement were off the mark. Brand-squatted accounts, as reported last week in Ad Age, remains an issue for many companies. For those that are on board, many more are largely tepid accounts with limited activity and interactivity (76% of accounts tweet infrequently). Even more telling is how companies apply currently traditional marketing practices to this new media channel.
• LinkedIn and Twitter Partnership: Do's and Dont's for Users:

• Social Media Lessons from Bill Cosby: has taught us about a lot of things over the years, like parenting skills, how to pick out snazzy sweaters -- and now, how to succeed at social media. Cosby held a "virtual town hall" on Oct. 19 to discuss issues that face the African-American community and support his latest album, "Bill Cosby Presents the Cosnarati: State of Emergency." It features rappers Jace the Great, Brother Hahz and Super Nova Slom.
• 5 Tips For Creating Compelling PPC Ads: Search engine marketers are always looking to capture a valuable and relevant click throughout their pay-per-click campaign. Here are five ways to help target those all-important searchers through compelling and effective ad copy.

And last but not least, Tips to help you optimize for success on Facebook. Top 10 Ad Creative Tips:

Your No. 1 Upgrade For 2010: Lifecycle Marketing

by Loren McDonald , Thursday, November 5, 2009

If you're already thinking about how to take your email-marketing program to the next level in the coming year, you should start by switching out your batch-and-blast program for one that uses lifecycle marketing to send highly targeted and relevant messages.

Although it might be a challenge to persuade your upper management to invest time and money to upgrade your email program, this story of a company that boosted its conversion rate 40% using segmentation and targeted messaging might help loosen up the budget.

First Challenge: Move Beyond 'One Size' Email

Fabric.com (a client), a provider of customer-measured fabrics, operates a custom-tailored business but at one time offered customers only a basic "one size fits all" email service.

The company, founded in 1999 and acquired by Amazon in 2008, had no way to customize its messages or segment its database; thus, its messages didn't reflect what it had learned about how its customers bought its products.

Its homegrown email service also didn't provide detailed reporting or analysis on email delivery to subscribers' inboxes. Without the infrastructure to capture this kind of information, you have no way of knowing how well your program is performing and can't justify seeking more budget or company support.

Strategic Mix: Segmentation, Triggers, Preferences, Analytics -- Even Broadcast

Fabric.com began by segmenting its database according to customer behavior, from most active to least active. It began sending out offers customized to each segment, intending to keep loyal customers engaged and entice back inactives.

The company also created a preference center that asked subscribers for birthdates, email and frequency preferences, and details about their sewing habits (experience level, preferred kind of sewing, whether for business or personal use).

One important aspect of this email program makeover is that Fabric.com uses the data it collected, both in its preference center and through integration of a Coremetrics LIVEmail analytics program.

Too many marketers still fail to leverage the data they collect, such as gender and birthdate.

The birthdate it collects at opt-in generates the Happy Birthday email. The analytics program generates a "Happy Anniversary" email on the anniversary of the customer's first purchase from the company.

It also sends shopping-cart reminders for those who leave the site with items still in their carts or who buy fabrics swatches but don't return within two weeks to buy the full fabric.

These are three key approaches that help get Fabric.com email messages noticed in the inbox, where yet another 20%-discount or free-shipping offer might fade into the background.


Even with the highly targeted and personalized messages that Fabric.com's email marketing team produces, broadcast messages still have a place, promoting sales, new products and "Deals of the Day" for subscribers who opt in to those lists.

Results: Higher Conversions, and Benefits Beyond Email

First, the automated lifecycle emails helped Fabric.com double its open and click-through rates and led to a 40% increase in conversions.

Next, the cart-abandonment program helped generate a 20% increase in order size on conversions from cart-abandonment reminders.

Finally, the improvements in the email program had a ripple effect in other departments at the company.

In an earlier ( http://www.mediapost.com/publications/index.cfm?fa=Articles.showArticle&art_aid=109114) Email Insider column, I suggested that one way to get greater buy-in for your email program is to go outside your department and help other departments of your company find ways to meet their goals.

Besides bringing in additional revenue, Fabric.com's triggered email campaigns also generated orders during normally slower periods. This helped the company to plan better, thanks to a steady stream of revenue, and also helped with workflow at the company's warehouse.

Until next time, take it up a notch!

Eric Schmidt, CEO of Google, interviewed at Gartner Symposium/ITxpo Orlando 2009

Tonight we watched an excerpt from Eric Schmidt's interview. Here is the full 45 minute video

Web Design and Psychology - The Design of Everyday Things

What is one of the most informative and inspirational books I've ever read and one that helped me when thinking about website design, usability and architecture? It's not what you would think. No, it wasn't an XML for Dummies or a Wordpress 101 book.

It was The Design of Everyday Things by Donald Norman.

This is the book that I recommend to anyone involved in design, especially interactive design and programming. The reason for this is because the online space is, or should be, all about the user experience.

As we discussed in Session 2 on 10.28, before you go down the path of developing your site you need to think carefully about what the site will be about, how will consumers interact with it, and what is the story it will tell. It's easy to forget that the consumer is alone without guidance and trying to figure out how to accomplish what they need to do at your site. It's important to make it easy for them to do so, especially when there could be multiple reasons to be there.

What I love about this book is that it opened my eyes to the psychology of design - which is what the user experience is all about. Here is an example: Think about walking up to a door. If the handle is horizontal, what do you do? Push, right? And if the handle is vertical? You know (or have been trained) to pull it towards you.

But have you ever walked up to a door and the door doesn't act the way you expected? People generally blame themselves for the mistake but in reality it's the door's designer or installer who is wrong, not you. They didn't think about the way we've been trained to interact with the door.

There are cues for websites too. An icon in the upper left (typically a logo) is usually clickable to go back to the home page. When it isn't you get frustrated. And you typically don't equate that with wanting to come back.

This book will resensitize you to the parameters you live with in. To quote: It could forever change how you experience and interact with your physical surroundings, open your eyes to the perversity of bad design and the desirability of good design, and raise your expectations about how things should be designed

Always Something New

As Brad mentioned in our first class, what you learn today will be changed or new or even obsolete very soon in the future.

We will be learning more about Twitter in our Social Media session, but I wanted to share a "so-new-it's not-even-fully-available" feature called Twitter Lists.

Twitter lists is a new feature currently being rolled out over the Twitter-verse which will let people "curate" the real time web. People will be able to make lists of Twitter users into the categories they choose.

There is even a site created for sharing these lists already created called Listorious.

Listorious aims to make finding these lists easier. The lists will be an interesting look at what a person you follow finds relevant too.

I'm sure Google and Bing will also be very excited to see how users index Twitter users and their content.

Make sure to follow DMBootcamp on Twitter and connect with our speakers via Twitter as well.