Razorfish Outlook 2010
The new Razorfish Outlook Report launched at 24,May. Shiv Singh’s Going Social Now blog had some of the highlights of the report which include insight into how brand and direct response are an important area of focus in the economic downturn. The proliferation of direct response is directly related to the performance marketing industry and the vital role we play in helping build brands…this role is vital to our industry’s growth.
Downturn or no downturn. Brands are about building sustainable long term business models and partnerships that are accretive to the brand (both of which we need to focus on to grow our own industry!). Make sure to read this report. I have found it to be one of the most useful research reports in context to where our markets are heading. Here are Shiv’s highlights.
- There was a recovery in spending in 2009 over 2008, albeit a small one. The average client media spend increased 4% in 2009, as opposed to decreasing 13% in 2008. This mirrors broader industry metrics as far as the recovery is concerned.
- Other interesting factoids. We bought media on over 900 properties in 2009 but 45% of the total spending went to the four major portals (MSN, Google, AOL and Yahoo!). Over 50% of media dollars went towards highly efficient channels such as search and ad exchanges. Around 20% of our clients are testing ad verification systems, local advertising is seen to grow and emerging ad formats are seen to gain prominence in 2010.
- Social media, which has exploded in popularity over the past few years, still only garners 4% of average client media spend. However, much of the cost of social media comes in the form of labor, not ad space – an important distinction when analyzing and planning media budgets. It is worth noting that the people costs aren’t included in our numbers. Also, the spending does vary based on industry and clients dramatically.
- Clients continued to experiment with new media. Digital out-of-home in particular experienced significant growth, along with ad exchanges, data brokers and social media. I fully expect us to see more digital out-of-home and mobile spending in 2010. This spending will still be a fraction of marketing budgets but it will grow dramatically. In the case of mobile spending, it is worth noting that some of it takes the form of application development which is not reflected in our media numbers.
- Contrary to popular belief, not every brand shifted its advertising focus to direct response as a result of reduced consumer spending. In fact, 60% of clients who did switch the approach of their ads actually moved to a more brand-focused message. To me this represents the fact that more marketers are recognizing that investing in one’s brand in a downturn is one of the best ways to prepare for a recovery. The investments produce a greater ROI in the long term as long as the pressure to maintain sales (think direct response advertising) isn’t too strong.
Wow, this was very interesting to read. Have you ever considered submitting articles to magazines?
Date Hello, I have browsed most of your posts. This post is probably where I got the most useful information for my research. Thanks for posting, maybe we can see more on this. Are you aware of any other websites on this subject