Interactive spending continues to climb

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Two new studies released this month confirm the growing importance of interactive marketing channels. B-to-b spending on interactive marketing will more than double in the next five years, jumping from $2.3 billion in 2009 to $4.8 billion in 2014, according to Forrester Research's “B2B US Interactive Marketing Forecast, 2009-2014.” The recession has hastened the adoption of interactive marketing. B-to-b marketers “have begun to clamp down on expensive offline tactics and are instead turning to measurable, ROI-driven online channels,” Forrester analyst Michael Greene wrote in the report. Similarly, research company Outsell concludes that digital marketing expenditures this year will account for 40% of overall b-to-b marketing spending, while print spending will account for 31.8%, according to its “Annual Advertising and Marketing Study, 2010.” Although the two reports reach the same general conclusion about the rise of digital spending, they vary widely in scope. The Forrester report focused on b-to-b marketers' external expenditures such as paid search, search engine optimization and display advertising. The report doesn't include, for example, a marketer's internal expenditures on its corporate Web site. The Outsell report, on the other hand, included in its calculations spending on company Web sites and other internal expenditures. (That report, based on an online survey of 1,008 U.S. marketers in December, also examines offline expenditures.) Outsell estimates that spending by b-to-b marketers on company Web sites will total $26 billion this year. “Spending on advertisers' own Web sites is overlooked by narrowly focused, non-360-degree commentaries and reports that selectively focus on single types of online advertising. This oversight misses a significant disruptor in how total marketing and advertising spending is allocated,” wrote Chuck Richard, VP-lead analyst, and Sheila King, director of primary research, in the Outsell report. Outsell forecast that total b-to-b marketing and advertising spending will reach $129 billion this year, a slight gain of 0.75% compared with 2009's dismal performance. Most of this growth will stem from increases in b-to-b interactive spending, which is anticipated to grow 9.2% to $51.5 billion this year. More than 50% of that interactive spending will be on company Web sites, which is expected to increase 7.5% this year. Other interactive marketing tactics are projected to grow faster: social networking sites (43.3%), webinars (26.0%) and search engines (17.1%). Offline marketing tactics will hold their own this year, according to Outsell. While print overall will decline 3.2% this year to $41.0 billion—led down by newspaper display advertising (-7.1%) and print directories (-10.1%)—b-to-b spending on print magazines is projected to rise 1.0%. In-person-events spending will fall 1.7% this year to $26.4 billion, with trade shows also dipping 1.7% and conferences falling 2.8%. Despite the expected declines in events and print, the Outsell study offers evidence that b-to-b marketers still value these traditional formats. For instance, b-to-b marketers identified the top three lead-generation media as trade shows, company Web sites and conferences, in that order. The top three media for branding were the same three in a different order: company Web site, conferences, trade shows. Additionally, Outsell asked b-to-b marketers about the effectiveness of cross-platform marketing. Almost two in five (38.6%) said that a single format by itself was “extremely or somewhat effective.” At the same time, 72.5% said that multiple formats together were “extremely or somewhat effective.” Based on these findings, Outsell advised b-to-b publishers to think twice before giving up on print or face-to-face events. “Decisions to abandon the traditional media of print and events build in a loss of effectiveness and ROI for advertisers that will lead them to pay less for the one media offering than the cross-media offering,” the report said. While Outsell's report focused on 2010, Forrester's report looked beyond this year, anticipating changes in b-to-b interactive marketing spending through 2014. Paid search accounted for almost 70% of b-to-b online spending last year and will continue near that mark moving forward, according to Forrester. While spending on display advertising fell 9% last year compared with 2008, search engine optimization spending increased and eclip- sed spending on online display advertising. Forrester anticipates that online display advertising spending will increase modestly this year as marketing budgets bounce back. “Even with a short-term spending decline in 2009, display advertising will grow faster than any other established interactive category ... from 2009 to 2014,” Greene wrote. Greene anticipated that social media spending will increase (not including internal costs such as staffing and training) from $11 million last year to $54 million in 2014. The Forrester forecast was based on an online survey of 204 marketers as well as interviews with advertising agencies and interpretation of publicly available information. M
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