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Marketing Study explains growth in Interactive Business


ith all the economic doom and gloom in the news today, people often ask me, “how’s business?” They then act surprised when I say things are great for our interactive agency. When they probe as to “why?”, my response is: When the economy turns south, the first thing businesses cut is the marketing budget. The second thing they cut . . . Is marketing. However, the interactive portion of most marketing budgets is tiny, usually less than 5%. My theory is that if marketing budgets are indeed being cut, businesses are shifting dollars to interactive because of its effectiveness.

According to a recent study by Outsell, “Annual Advertising and Marketing Study 2008,” I’m half right. Dollars are being diverted to online and interactive but US advertising and marketing budgets will actually grow 3.9% in 2008 to reach $412.4 billion.

From the study, here are some of the actual numbers that support my view that interactive is growing:

  • Companies are spending 61.8% of their online ad/marketing budgets – $65.1 billion – on their own sites, siphoning dollars away from other options.
  • The fastest-growing of all ad types is online, which is expected to grow 12.3% in 2008 to $105.3 billion (or $40.2 billion excluding advertisers’ spending on their own sites). As a result, online spending now exceeds TV/radio/movies for the first time ($98.5 billion).
  • Out of 26 methods measured for effectiveness, advertisers rate their websites as the best for lead generation (75% effective), followed by exhibitions (66%), custom print publications (65%), direct mail marketing (64%), and trade magazines (64%).

So, it’s not the doom and gloom everyone’s predicting.  The only problem I foresee in the the interactive space is a shortage of resources, similar to what happened during the Dot Com rush. However, this time we’re not likely to see a Dot Com bust.

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