The rise and rise of digital marketing
Let’s face it times are difficult, but digital marketing continues to demonstrate impressive growth as some other media channels are gasping there last. Agencies with broader skill bases and innovative ideas are prospering and are doing well. Now we’ve all got over the Global Credit Crunch Crisis Shock and we’re faced with ‘budget squeezing’, ‘spend freezing’ and ‘funding hickups’. But hang on, it’s not a total economic disaster for agencies. Integrated and digital agencies remain upbeat and some are doing well. Digital remains a growth area, and is propping up the market. According to the IAB online advertising spend, has increased 22% year-on-year to reach £1.7 billion in the first half of 2008. Rocketing the online share of spend to 18.7%, that’s only 3% behind TV, which accounts for 21.7%. In real terms, online has swelled by £2 billion in 3 years
Hang on - it’s not all champagne and backslapping. At the Association of Online Publishers conference Sly Bailey, Chief Executive of Trinity Mirror, predicted a slow down of growth for the digital sector. In short Sly pointed out that brands will continue to invest in online channels, however in her next breath said that this investment has to be converted into profits, or there are going to be some significant casualties…
Lets face it, online is now just another mainstream marketing channel, not just in terms of budgets. We are witnessing a paradigm shift in the agency world, as the term advertising agency is replaced with integrated media agency. A quick review of the 2008 Cannes Lions International Advertising Festival demonstrates that the rising stars for outstanding creative include digital agencies and that’s great news.
Further evidence of the upstarts becoming the masters is reflected in this year’s league tables, with agencies Iris Digital and Syzgy reporting YOY growth of over 198% and 188%. It doesn’t end there either nearly three quarters of digital agencies declaring double-digit growth and only a few experiencing a decline. Of course a lot of these rah, rah we’re great figures include their 2007 calendar year and therefore might not demonstrate the full extent of the economic downturn.
As digital becomes more than a tactical channel and a branding channel in its own right. We are seeing our lovely clients becoming more comfortable with their digital media and are starting to recognize the potential of linking activities together, in other words digital is becoming the glue that bonds their integrated marketing together.
This realisation that consumers are moving online and view the whole digital offering as one large panorama not just the website, is leading marketers to consolidate not just all digital work into one agency but their offline projects too. This composite approach puts serious importance of the strength of the digital marketing offering and is a major step change for agencies. In the old days ‘nerds’ would be dragged to a pitch incase of tricky technical question, now they are leading the whole pitch. Or put another way; online is now integrated into traditionally offline activities and the terms ‘online’ and ‘offline’ are getting ready for retirement.
If you are a traditional marketer and are feeling little threatened don’t! No really, don’t because something strange and rather fun is happening. Its goes a little something like this as technical traditionally ‘nerd’ based agencies are trying to bolster their strategic credentials so they are recruiting planners and traditional advertising experts to help them gain trust. And yes, you guessed it agencies like Brightenup are becoming more technical as we adapt to our changing market.
One thing hasn’t changed is the need for careful evaluation and measurement to prove ROI. As Budget Squeezing’, ‘Spend Freezing’ and ‘Funding Complications’ get worse ROI and accountability of the marketing budget becomes paramount. Strangely there are some big arguments raging about how best to effectively measure effectiveness online. There are gazillions of ways to measure clicks, page impressions and bounce rates, however there are still some variables that are not well measured, such as social media that will struggle until the industry can really qualify its effectiveness. This said, overall digital mediums by their very nature are better prepared to measure and prove their worth than their offline counterparts and has led to digital channels benefiting from organic growth as the spend reallocated. In effect clients are switching there spend from traditional advertising to digital media.
Sounds a bit doom and gloom for those traditional agencies. But of course it’s not like that. Traditional larger agencies that want to survive are starting to graft digital DNA into their base culture and will change. This takes time and is not an easy route but it is the most suitable those that simply buy a digital agency like a pet, are really missing the point and will remain traditional in there outlook.
Agencies that have welcomed digital channels have enjoyed a flurry of stimulating changes, not only in the channels they offer but the dynamic that stimulates the group. Marketers and nerds have traditionally not been the most comfortable of partnerships with a healthy dose of mutual misunderstanding. Now though this partnership has become a love affaire based on mutual respect and integration, ahhhhhh thats nice.
Like all good things there is always an end. The rise and rise of the digital agency will become a victim of its own success. Ironically the nail in digital only agencies is the fact the medium becomes mainstream. As we charge head long into a challenging 2009, we will probably start to see an increased amount of consolidation, smaller agencies will begin to team up, especially those who can leverage an advantage from utilizing skill sets and create further efficiencies and better ROI.
In conclusion while digital media is the star to guide us through a gloomy economic night, we still need work bloody hard to prove value and create tip-top creative, that’s integrated with compelling measurement and founded upon sound strategic thinking and planning.
Tags: Business, Digital, Marketing, Social Media, Websites