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One of the few bright spots

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Online may be the only medium that continues to see advertising growth in the recession, although the phenomenal expansion of the past decade is slowing as the overall economy slumps. Total Internet ad revenue last year was $23.4 billion, up 10.6% over 2007, according to the Interactive Advertising Bureau and PricewaterhouseCoopers. By comparison, IAB said that Internet ad revenue grew 26% in 2007. The growth is expected to slow even more this year, as marketers slash their budgets. According to a recently revised forecast from research firm eMarketer, Internet advertising will grow only 4.5% this year. “It is true that the growth rate for interactive has slowed over the past 12 months, but marketers are continuing to migrate a greater percentage of their precious ad dollars toward the digital channel,” said Geoff Ramsey, CEO of eMarketer. “Now that we've entered into the depths of the current recession, the Internet is emerging as one of the only bright spots in an otherwise decimated media landscape.” Most b-to-b marketers say that shifting more of their budgets online is a key strategy during the recession, and they are exploring innovative uses of the medium, from more widespread use of online video to social media marketing. “Our budget is up for digital, as it has been up every year,” said Beth Comstock, VP-CMO of General Electric Co. “About 15% of our spend [in 2008] is on digital. In my mind, that is not enough. One of my goals is to continue to shift that spend.” While GE continues to spend on traditional such media as TV, print, outdoor and events, it is boosting its online advertising and expanding its use of new technologies. For example, last year it was the first advertiser to use live streaming video within a banner ad, employing a new technology developed by rich media company EyeWonder Inc. GE used the technology, called LiveWonder, to deliver a live webcast of Chairman-CEO Jeff Immelt presenting the company's annual report to investors in a banner ad campaign that ran on 10 Web sites. “Using live video in banner ads was a way for us to start a conversation with investors about our financial performance and company objectives,” said Jen Walsh, digital media director at GE. Motorola Inc. is another b-to-b advertiser that is shifting more of its budget to online to achieve greater efficiencies in a down economy. “We feel that interactive media provide very effective ways to get to the end user,” said Eduardo Conrado, corporate VP-global business and technology marketing at Motorola. “By having interactive assets and working with our databases, we can have very targeted messages. It allows us to take much more of a laser approach.” For example, last year Motorola introduced a campaign, “Technology That's Second Nature,” created by BBDO New York and Atmosphere BBDO, New York. The integrated effort was aimed at vertical segments within the government and public safety communities, including police chiefs, fire chiefs and municipal CIOs, and drove users to a “virtual city” where they could try out different Motorola technologies. Unlike past advertising campaigns, Motorola developed the online component before the traditional ones, including print, direct and collateral. “In our prior campaigns, we usually did the offline assets first,” Conrado said. “With this campaign, online is our primary delivery tool, and we created it first. More and more, we will continue to do that as our marketing spend is shifting to that area.” Another big push for marketers this year is using social media. According to eMarketer, social media ad spending is expected to reach $1.3 billion this year. One marketer that is aggressively using social media as part of its integrated marketing is Cisco Systems. Last month, Cisco unveiled an online campaign, called “The Realm,” that uses superhero figures and social media to engage security professionals and IT users. The campaign, developed by OgilvyWest, Los Angeles, features a series of webisodes in which superheroes with names like “Wall” and “Trace” fight off threats to the security of the enterprise. The webisodes, which are running on the Cisco site as well as on YouTube, are being promoted heavily through online ads on tech sites, as well as on social media networks such as Facebook and Twitter. “We are leveraging social media and have reached out to top security bloggers and invited them to start blogging and create conversations about these superheroes,” said Marie Hattar, VP-network systems and security marketing at Cisco. Microsoft Corp., another leader in b-to-b online advertising, has already shifted more than half its marketing budget to digital. It is using digital media not just in online ads but in traditional campaigns as well. For example, in January Microsoft kicked off an integrated campaign, “It's Everybody's Business,” designed to show how its technology is helping people run their businesses successfully given the slow economy. The entire campaign, including the TV spots, was digitally produced, featuring senior executives such as Katie Bayne, CMO of Coca-Cola North America, and Robert McKnight, CEO of Quiksilver Inc., discussing how technology is helping their businesses run more efficiently. “We've taken a hard look at every advertising and marketing dollar we're spending, and there are areas where we're changing plans,” said Gayle Troberman, general manager of advertising and customer engagement at Microsoft. For example, Microsoft conducted phone interviews with the executives, then combined those with digital animation to produce the ads. The TV spots and the print and online ads drive users to a microsite, where they can learn more about Microsoft technology.
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