As 2008 comes to a close and advertisers and media agencies get ready to set their budgets for 2009, there is increasing evidence that online (digital) advertising will continue to grow at a double-digit pace throughout 2009, according to the Interactive Advertising Bureau (IAB) of Canada.
The bureau's projected total for 2008's online advertising revenue in Canada is estimated at some Can$1.5 billion (25% percent more than the 2007 actual total of Can$1.2 billion).
A recent article in the US Media Post reported that three major advertising and media services firms (Aegis, Interpublic and Publicis) all see digital media as a "stable source of results, even amid an uncertain economic outlook in 2009". Publicis Chairman and CEO, Maurice Levy, was quoted as saying that digital media would "likely prove the most resilient form of marketing expenditure, should the economic environment remain erratic or worsen".
According to Paula Gignac, president for IAB Canada, the internet now reaches more adults each week than magazines and newspapers, and it reaches more 18-24 and 25-34 year-olds each week than the radio. However, the internet is neck-and-neck with television for reaching the 18-24 age group.
However, even though consumers spend an estimated 23% of their weekly free time online, 2007 online advertising revenue targeted at Canadians (both on Canadian sites, and at Canadian "eyeballs" on US-based sites) represented only 8.7% of total Canadian advertising spending, suggesting that advertisers haven't yet begun to use the medium to its full potential.
The growing importance of the internet as an essential part of the marketing media mix was also underscored by recent research from the IAB which found that so-called 'Internet Imperatives' (i.e. consumers who are heavy internet users but only light television viewers) make up around 25% of adults aged 18+ in Canada, and are thus prime prospects for a wide range of upscale consumer products and services.
In fact, these individuals score higher for several key consumer qualities than TV Imperatives (heavy TV viewers but light internet users), Light TV & Internet users, and Heavy TV & Internet users. For example, the group more often tends to include:
- Consumers who spend Can$1,500+ monthly on credit cards;
- Consumers who own Can$5,000+ worth of personal computers;
- Consumers make Can$10,000+ RRSP contributions annually;
- Consumers who own a car worth Can$50,000 or more;
- Consumers who spent Can$50,000+ on home improvement last year;
- Consumers who carry Can$500,000 or more in life insurance;
- Consumers with a home valued at Can$500,000 or more;
- Consumers who hold Can$500,000 or more in securities and savings.
According to the IAB, marketers and advertisers will need to focus on five key strategies during 2009:
- Keep brand awareness, message association and favourability top of mind with consumers, by investing in display advertising. According to a recent comScore Media Metrix 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). And, even when products were available for purchase via e-commerce, of the 100% of sales that were attributed to display advertising, a full 68% actually occurred offline rather than online.
- Drive purchase intent and actual conversions through display and search synergies. In their '2008 Digital Outlook Report', Avenue A and 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". And, in a similar study by the Atlas Institute, users who clicked on search ads who were also exposed to display ads were 56% more likely to purchase from their client, Alltel Wireless.
- Drive direct response by making sure you deliver the correct frequency of ads (NB: Dynamic Logic studies suggest 4-9 ads per user per day), and by optimising creative type and offer messages. Also, marketers should explore "performance branding", which combines both branding and direct response tactics.
- Drive engagement, whether you measure it in interaction rate, interaction time, pages or videos viewed, comments entered, and so on. Build frequency over a variety of types of sites for each plan (e.g. by combining portals, vertical networks, niche sites, etc.). But also use branded content programmes online, as these 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). However, these programmes also find their effectiveness multiplied when implemented in tandem with TV, newspaper, magazine, radio or out-of-home.
- 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 rapid pace and, because these environments often combine a variety of Web 2.0 technologies (e.g. 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 already mentioned above. Advertisers should think not only about customising content and experiences for these platforms, but also why such content will be shared between like-minded community members.
The company warns that conversation, collaboration and commitment will be needed to achieve real success in this area, but there are already numerous success stories, best practices, and metrics to help marketers make the transition to a more digital strategy. According to Gignac, "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."