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Interactive Marketing Captures Large Slice of Traditional Media Budgets

21 Jul 2009

Funds are being shifted from traditional media with marketers increasing their interactive marketing budgets in the US. According to Forrester Research, 60 percent of marketers surveyed will be increasing their interactive marketing budgets. Direct mail will be the hardest hit with 40 per cent of marketers pulling funds away, followed by newspapers at 35 per cent, magazines at 28 per cent and television at 12 per cent.


As reported by the US based Center for Media Research, among the interactive channels, social media and mobile marketing spending will expand between 2009 and 2014 with social media expected to jump by 34 per cent on a compounded annual basis starting at US$716 million in 2009, increasing to US$3.11 billion by 2014 and mobile marketing increasing by 27 per cent being US$319 million for this year and US$1.27 billion by 2014.


Online advertising which is currently US$7.83 billion will rise by 17 per cent annually, ending up at US$16.9 billion in 2014. Search marketing which currently accounts for US$15.39 billion in spending will jump by 15 per cent to US$31.59 billion and email now at US$1.25 billion will increase by 11 per cent to US$2.08 billion.


Whilst interactive media expands, a corollary report from Forrester shows that budgets for traditional media along with staff, training spending, branding and advertising expenditures have been cut by two-thirds from last year and more than half of direct mail budgets have been cut.


Budget reductions from 2008 include 29 per cent reduction in marketing technology, 27 per cent in online advertising, 22 per cent in website development budgets, 21 per cent in loyalty program spending, 11 per cent reduction in email marketing and 7 per cent in social media spending.


Among those facing lower budgets 19 per cent said they cut branding and advertising because they were unable to track the results, 26 per cent said the same about TV, print, radio or magazine expenditures and 19 per cent reduced their direct mail spending because it delivers the lowest ROI.


In terms of interactive marketing however, 47 per cent of marketers whose budgets have been cut are increasing spend on social media, 44 per cent are increasing spend on website development , 40 per cent will spend more on online advertising and nearly the same amount will increase financial resources in email.


Just over half of the marketers surveyed believe marketing is a revenue enhancer that should be supported however 41 per cent indicated that marketing efforts are under increasing scrutiny from all levels of the company and 18 per cent are working in firms where marketing is seen as a cost centre that needs to be cut.



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