What does the aggregate US and global economic crisis really mean for digital and new-media initiatives by marketers? The Wednesday, October 15, edition of The Wall Street Journal carried an hysteria-driven article by reporter Emily Steel, who commented, “Financial woes likely will derail the growth of a slew of advertising technologies that until recently were being hailed as the next big thing.”
Is this really true?
She makes broad-based assumptions in her piece about marketers’ priorities and about the capabilities of digital and new-media initiatives. She also lumps together everything from mobile marketing to place-based media to advertising on social-media sites to embedded advertising on games and virtual environments in the same boat. She finally ignores the blurring of the lines over time between traditional non-interactive advertising, on one hand, and emerging interactive PR/social-media based digital marketing programs, on the other hand — making it harder to substantiate the reality of the exodus she predicts.
These programs and mediums are hardly all the same, whether judged on maturity of the platform or real effectiveness. And her broad-based comments do border on uninformed hysteria.
The article also ignores data that proves that digital and new-media initiatives continue to gain traction. Here are some figures I had readily available:
> Growth in place-based/digital OOH media ad spending: Media/advertising industry consultancy PQ Media believes that US advertisers spent $1.6 billion on place-based/OOH ad placements in 2007, growing to $3.1 billion by 2011 (cited in a previous blog post).
> Growth in mobile marketing spending: Tech-industry analyst firm Forrester Research believes that US mobile marketing spending will grow from $270 million in 2007 to $405 million in 2009 and $2.8 billion in 2012.
What does she cite as her evidence of this downturn in digital and new-media spending?
Steel’s argument is largely based on assumptions about the maturity of digital and new-media initiatives and assumptions that traditional media, such as broadcast, somehow is more proven and more effective.
She goes on to say:
In recent years, marketers have set aside a portion of their ad budgets to experiment with digital technologies such as Web video, mobile phones, gaming and virtual worlds. But with broader economic turmoil reaching Madison Avenue, these “experimental” budgets are among the first to hit the cutting-room floor.
Steel provides as evidence a data point from Chrysler LLC — an auto company with its own marketing woes — which has apparently “… already slashed its experimental ad buys,” said Steel. Of course she made no mention of peers such as the Scion divison at Toyota, which has moved over multiple years away from traditional broadcast advertising, with its low ROI, to digital and new-media initiatives that are a better fit for its younger, social-media and gaming-savvy audience.
She also serves up quotes and data from advertising-agency executives — whose interests are probably more aligned with traditional advertising channels. And Steel buries a dissenting point of view at the end of her article from a PepsiCo executive who actually argues the opposite of the reporter’s assertion: “The market is not going to drive us to miss one of the largest opportunities that we’ve had in a long time.”
Why are digital and new-media initiatives actually MORE compelling in a down economy?
I clearly disagree with Emily Steel, but why am I so confident in my beliefs? The issue is this: She is arguing from some broad macro-industry perspective, but she is not thinking like a marketer. In a tough environment, as marketers, we want to gain advantage … leverage … from our programs. We want to rise above the buzz and efficiently capture customers’ minds and wallets. And we want to move and change as their interests and lifestyles evolve.
Digital and new-media initiatives are, in fact, just what the doctor ordered in the current environment. Here’s why I believe that when marketers have to make tough choices, they will choose to keep or expand these initiatives……
> Moving from one-way ‘advertising’ to two-way ‘communication’: Digital and new-media initiatives offer the unique ability to not only speak to consumers but also to get their thoughts and feedback. These initiatives — for example, social networking sites such as Facebook and Twitter (cited in a previous blog post) — help us begin to move as marketers to a two-way dialogue with the consumer and our brand community, which improves our ability to engage with the consumer and to build and maintain a meaningful commercial relationship. It also helps us better target marketing communication on the basis of ethnography and psychographics than demographics — i.e., really knowing who our consumers are, not just guessing about them based on age, race, gender or geography.
> Rising above the buzz: Traditional media outlets, particularly broadcast with a never-ending explosion of new channels, are an increasingly-cluttered communication channel. The consumer can Tivo out the commercials; the consumer is more likely than not to have little network loyalty; and the consumer is increasingly more engaged on his/her computer, mobile phone or gaming console. As marketers, it’s critical that we find new ways to interact with consumers where our voices (and theirs) can be heard. Examples include mobile marketing, which I will be blogging on more over the next week and which can enable a marketer to target a consumer wherever (s)he goes, and place-based media.
> Small spend; low cost; high ROI: Not sure what else I can say. These programs are an order of magnitude less expensive than traditional broadcast media. And with their ability to rise above the buzz and be more interactive and two-way, they can have more impact and even more ROI.
> Staying with your consumer: Digital and new-media initiatives seek to (1) find the consumer as (s)he permanently shifts his/her time to new channels and (2) engage with him/her in new ways. And the consumer is, in fact, shifting; there is no doubt about that. The consumer’s time and attention is moving to new media platforms. Mobile marketing is one way to stay with the consumer, and new initiatives — such as advertising on video games — are incredible ways to maintain the continuity of the connection.
> Tracking results: The most significant argument that is heard time and time again about digital and new media initiatives is that their effectiveness can’t be tracked or that they don’t have standards. (Remember, this is what was said about Web banner ads less than ten years ago.) This could not be more off base. The reality is quite the opposite; in fact, these platforms have incredible ability to provide granular tracking of results — whether through the nature of the digital medium or through the nature of how social media mirrors consumers’ network. Nielsen and Arbitron may not be doing the tracking … yet … and the industry may not have agreed on a standard … yet. But this hardly means it can’t be done.
What do you think about Emily Steel’s article? Please share your thoughts.