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Shar Van Boskirk
I'm an analyst on Forrester's interactive marketing team studying interactive budgets, organizations, staff as well as search and email marketing.
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Josh -- to me the real zinger here for interactive marketers is the notion of cutting ad budget to create more interactive relationships with customers. This redefines interactive marketing as actually INTERACTIVE, not just spending to send traditional ads out through digital media.
The problem, Josh, is that email marketing WORKS for marketers in its present state. We all know we get too many emails, and we all know that marketers would be smarter to send fewer, more targeted messages. But the economic reality is that sending more email volume continues to generate positive returns to emailers. Its sort of like, we all hate telemarketing calls, but you still get them. Why? Because they work. Someone, somewhere is buying knives from the guy who calls you at dinner time. I still think that the ulitimate answer to the spam problem is one that has to make the marketer feel some financial pain. Jim Nail introduced this idea in 2003, and I think he was right: http://www.forrester.com/rb/Research/real_answer_to_spam_problem/q/id/33324/t/2. To get marketers to send less email you have to make them pay "postage" for each message they send.
Wanted to take a minute to reply to the comments here regarding the US Interactive Marketing Forecast. Thanks for taking the time to remark. A few of you remarked about the veracity of a 5 year forecast. It is certainly true that estimates like these are most accurate in the immediate timeframe. But Forrester's business is in making the hard call about how markets will change in the future. So our standard outlook is a 5 year horizon. Our belief is that it is worth putting a stake in the ground in order to force us and readers to consider all of the possible forces that can affect spend within a marketer's long term planning horizon. Regarding definitions of the different media included in the report, we do define them in the report in order to help readers scope what is "in and out" of the numbers. For example, mobile represents spend on mobile display ads and mobile search (display ads delivered to a content site accessed by a pc using WIFI are counted in the display advertising bucket, not the mobile one). Social media includes money spent to buy integrated social campaigns through social networks (eg, Chevy creating its plant a tree campaign with MySpace) and money spent to agencies for help developing owned social media assets. Diplay ads on social networks are included in the display ad bucket.
Thanks everyone for your comments regarding this research. I wanted to follow up the question about lead generation and CPA based ads. We don't size this as a separate bucket of media because it is more of a media buying model which is used to buy display media and search ads than a category of media. We do have data in the report which forecasts what % of display media buys are performance based. This number is at 58% today growing to 66% by 2014.
Toggle Commented Jul 20, 2009 on Advertising will change forever at Empowered
Wow! This post clearly struck a chord with folks. I think this is the most comments to date on a post of mine. Although I'm not surprised to hear the varying opinions about MS and its latest search engine, I *was* a bit surprised by the emotion expressed in people's comments. I guess I just never expected people to have that much passion for a search engine! Our research shows that 55% of consumers use more than one search engine every week. But it does sound like people feel a very strong emotional connection to Google, even if they flit around to other engines from search to search. Who has tried out Bing.com since it went live in the US this morning? What is your initial take?
Hi Jeff -- Social media includes two buckets of money: 1) Spend on integrated campaigns through social networks (think MySpace creating a page where users could record their version of the McDonald's Big Mac chant and then chat about it with other folks) 2) Spend to agencies for help creating owned social media assets (think a blog, community, discussion boards on your own site) Display ads on social networks are included in the display media number.
Thanks everyone for your comments. I'm glad to see this post generated so much curiosity/passion! To clarify, my point with the post was not to recommend marketers switch from an agency to an automated solution, nor to explain the ins and outs of Altruik's technology (I'll leave that to Tom Kwok and his team -- Tom, thanks for your post). I simply wanted to raise awareness of an emerging model of search marketing support: the self-service technology. These sorts of tools have existing in the past but have either been too simple, or too complex. Now we are starting to see multiple types of offerings that are flexible enough to suit myriad marketer needs. I would certainly agree that these tools don't provide all of the services that an agency can (which is why the title of my post is that automation will compete with and not *replace* agencies). And of course any new or existing vendor/agency has to prove itself and provide capable customer service/value. My point is simply that I think search marketers now have more viable options available to help them create sophisticated search programs.
Thanks all for your feedback; I'll try to address the comments raised. Regarding the mobile forecast, I would also agree that consumer behavior toward mobile is reaching a critical inflection point. In part due to the iphone and iphone applications which tie much better into life entertainment, employment, family activities than did previous mobile devices. However, I don't think consumer behavior is the only limiting factor in mobile marketing adoption. There are infrastructure issues too which are keeping marketers from fully embracing mobile (how are consumer mobile behaviors, responses to mobile promotions/ads, and even offer redemptions tracked? Can point of sale systems redeem mobile coupons? Are out of home ads or commerce locations mobile-enabled?). Because of the recession, I don't see this hard work beginning until 2011, which will stunt real mobile marketing adoption until 2012-2013. I don't actually have an interactive marketing forecast for rest of world. Forrester historically has sized US (this forecast)and Europe. But the data in India, China, Latin America is still too limited for us to be able to do a good forecast of those markets. Great question on the outbound IM channels investment compared to Website investment. We bandy that notion around at the beginning of every forecast cyle. But...the limitation comes again down to accessibility of data. Web site development costs are usually associated with agency fees, purchased technologies and internal resources costs...fees that we have a very difficult time accessing and standardizing. This model is based on media investment (and in some cases reported services fees) that we can actually define and validate. So for now, we keep not including Web development because of the difficulty in defining what would be represented in that bucket of money and how we would get to any accurate measure of it. I wholly agree with the notion of taking an integrated or multichannel approach to marketing. Even as marketers are shifting money from traditional to interactive tools, I would certainly second the thought that on is not universally better than offline. Channels should be planned in concert in order to be best used to further the brand and facilitate the consumer's experience.
Good comments on the mobile piece. I remain very cynical about mobile. Not about mobile's eventual marketing value -- I think it certainly has great potential for targeted, location-specific and time-sensitive marketing communications. But the reality is that today marketers aren't embracing it as they are other emerging media, nor are the mechanics of how to use and measure mobile worked out to a degree that will convince mobile naysayers (like me) that it is worth all the effort. Forrester does have some good research on the reality of mobile marketing. Check out this recent piece by my colleague Christine Overby http://www.forrester.com/Research/Document/0,7211,53590,00.html. But for the purposes of the forecast, keep this in mind, only 28% of marketers claim to be using mobile today and the % of firms expecting to adopt mobile this year has actually declined from last year. So our expected growth shows smaller in 2012 because I'm not expecting to hit a real inflection point in mobile marketing adoption until about 2012.
Scott -- great to hear from you and thanks for your comment. I'm actually in the process of writing the full report now (will include individual forecasts for each of the channels rolled up into that summary forecast) and I appreciate your thoughts on what insight you'd like to see in the research. I'm hoping to include long term and short term trends for each channel as well as recommendations and "WIM" for interactive marketers overall. Hope you are well!