Digital Media Viewed As Reliable Channel In Face Of Uncertain Economy

Interactive Media to Remain Strong in 2009

Whilst considering the economic situation, I found this article which I am sure will provide encouragement and ideas for what is important in 2009. This article came from The Internet Advertising Bureau of Canada.

Digital Media Viewed As Reliable Channel In Face Of Uncertain Economy: Studies Still Predict 15% Growth For Online Ad Spend In 2009

Toronto, ON. November 6, 2008 - As 2008 comes to a close and Advertisers, Agencies and Publishers get ready to set their budgets for 2009, there is increasing evidence that Online advertising will continue to grow at a double-digit pace in 2009.

The Interactive Advertising Bureau (IAB) of Canada's projected total for 2008 Online Advertising Revenue in Canada is estimated to be $1.5 billion -- a full 25% percent more than the 2007 actuals of $1.2 billion. "The 2008 revenue figure should be expected to be pretty safe," says Paula Gignac, President of IAB Canada, "as that budget was fully allocated in 2007."

And according to a recent article in the U.S. Media Post (Oct. 28, 2008), three of the world's biggest advertising and media services organizations -- Aegis, Interpublic and Publicis -- all see digital Media as a stable source of results for Advertisers, even amid an uncertain economic outlook for 2009.

In fact, Publicis Chairman-CEO Maurice Levy said that "...digital media would likely prove the most resilient form of marketing expenditures should the economic environment remain erratic or worsen."

Levy pointed out that digital marketing and communications efforts are highly measured: "...we know the return on investment immediately, we know what works and what doesn't work. So I don't see digital collapsing, I don't see digital going down, I see digital still growing in 2009 and the years to come."

A recent survey of comparative estimates of 2009 Online advertising growth compiled by eMarketer for the U.S. backs this opinion up, and shows most studies still predicting around 15% growth for Online ad spending for 2009, with the average growth estimated at around 10%, when even extreme negative scenarios considered.

Comparative Estimates: U.S. Online Advertising Spending Growth (% change)

Source: eMarketer, August 2008; various, as noted, 2008

Making The Most Of Advertiser Investment In Tough Times: Following The Consumer

According to IAB Canada's annual review of syndicated media research studies across Canada (PMB, NADbank, BBM/RTS), the Internet now reaches more adults each week than Magazines and Newspapers. The Internet reaches more 18-24 and 25-34 year olds each week than the Radio; while the Internet is neck-and-neck with TV in terms of 18-24 year old weekly reach.

And although consumers spend an estimated 23% of their weekly time Online, 2007 Online advertising revenue targeted to Canadians (both on Canadian sites, and to Canadian "eyeballs" on U.S. Websites), represented only 8.7% of the total Canadian advertising spend -- indicating that Advertisers haven't even begun to use the medium to its full capabilities.

Understanding The Internet Imperative

The growing importance of the Internet as an essential part of the media mix is also underscored within new research from IAB Canada (conducted by Rob Young, Sr. VP Planning Services, PHD Canada, and due for release in January 2009), which utilizes data from PMB's 2008 study, and shows that Internet Imperatives (consumers who are heavy Internet users, but only light TV users), make up approximately 25% of adults 18+ in Canada, and are a very important group of consumers and prime prospects for a wide range of upscale consumer products and services.

In fact, Internet Imperatives index higher than each of TV Imperatives (consumers who are heavy TV users, but only light Internet users), Dual Light TV/Internet and Dual Heavy TV/Internet users as:

• Consumers who spend $1,500+ monthly on credit cards;
• Consumers who own $5,000+ Personal Computing systems;
• Consumers make $10,000+ RRSP contributions annually;
• Consumers who own or recently purchased a new, $50,000+ car;
• Consumers who spent $50,000+ in Home improvements in past year;
• Consumers who carry $500,000+ in life insurance;
• Consumers with a home valued at $500,000+;
• Consumers who personally hold $500,000+ in Securities and Savings.

What Advertisers Need To Focus On In 2009:

1) Keep brand awareness, message association and favourability top of mind with consumers, by investing in Display advertising (Standard, Rich Media and Video formats). According to a recent comScore Media Metrix research study, because the overall number of unique people reached by Display is so much higher than that of all other Online advertising vehicles, the total dollars in actual sales gained by Display advertising is quite large -- as even a small purchase lift acts across such a large base. What's more, even when products were available for purchase via e-commerce, of the 100% of sales that were attributed to Display advertising, a full 68% of sales actually occurred offline vs. Online.

2) Drive purchase intent and actual conversions through Display and Search synergies. In their 2008 Digital Outlook Report, Avenue A l Razorfish showed that "... previous exposure to a Display banner increased the likelihood that a user would enter a branded search query instead of an unbranded query by 55%, thereby moving the prospect further along the sales funnel and generating a cheaper Search click conversion." In a similar study by the Atlas Institute, users who clicked on Search ads who were also exposed to Display, were 56% more likely to purchase from their client, Alltel Wireless.

3) Drive direct response by making sure you deliver the correct frequency of ads (Dynamic Logic studies suggest 4-9 ads/user/day), and by optimizing around creative type and offer message. As well, explore as "performance branding" -- a new entrant on the scene, which combines both branding and direct response tactics.

4) Drive engagement -- whether you measure it in interaction rate, interaction time, pages/or videos viewed, comments entered, etc. -- by building frequency over a wide variety of types of sites per plan (e.g. by combining portals, vertical networks, niche sites, etc.), but also through branded content programs Online. Branded content programs work well on their own -- a recent ABC.com study found the average unaided TV ad recall across sponsored full episodes Online was double that of typical TV ad recall -- but again, these programs find their effectiveness multiplied when implemented in tandem with TV, Newspaper, Magazine, Radio or Out of Home.

5) Build brand loyalty and word of mouth marketing through Mobile and Social Influence Marketing. Mobile phones and Social Networks are gathering fans of all ages at a breakneck pace. And because these environments often combine a variety of Web 2.0 technologies -- including RSS, blogs, podcasts, chats, photo/video sharing, virtual worlds, widgets and wikis -- they should be fertile ground for experiments in all of the targeting and tactic options mentioned above. Advertisers need to think not only about customizing content and experiences for these platforms, but also why such content would, and could be shared between like-minded community members to drive results. Conversation, collaboration and commitment will be needed on both sides to build success in this arena -- but -- there are already numerous success stories, best practices and metrics to help advertisers make the transition in strategy.

"There's actually never been a more appropriate time for Advertisers to take advantage of the creative, targeting, community-building and accountability options inherent within Interactive advertising," says Paula Gignac, President of IAB Canada. "Consumer time spent on the Internet and in other Interactive channels will continue to grow regardless of the economic environment, for the simple reason that these channels continue to enrich the lives of consumers, and satisfy their needs across both utility and entertainment fronts on a daily basis. In the months to come, smart Advertisers will keep their eye on the media choices of consumers rather than daily stock market fluctuations, and forge ahead with their plans to shift more dollars into Interactive advertising in 2009."

For more information contact:

Paula Gignac

President, IAB Canada

iabcanada.com

416-598-3400 (ext. 26)

The Interactive Advertising Bureau of Canada (www.iabcanada.com), is the national voice and de facto thought leader of the Canadian Interactive marketing and advertising industry, and is a not-for-profit association representing a membership composed of advertisers, agencies, publishers and Interactive service associates.