Marketers move from traditional to digital due to failing economy

By Giselle Tsirulnik

November 6, 2008

Marketers are moving from traditional to digital

NEW YORK -- Despite the economic downturn, marketers need to keep marketing because consumers will continue to consume, according to an eMarketer executive at ad:tech New York.

The eMarketer executive gave a room of interactive marketers some hope at ad:tech New York's session titled, "Digital marketing now: Strategies for surviving the downturn."

"Capitalism is not dead, the machinery is still going strong, consumers still need to consume, to buy stuff," said Geoffrey Ramsey, cofounder/CEO of eMarketer, New York. "Consumers still need information about products, brands, where to buy stuff and where to get the best deal."

EMarketer is a market research firm specializing in trend analysis on Internet, ecommerce, online marketing, media and emerging technologies.

Media spending on the part of marketers is being affected tremendously by the economic downturn, Mr. Ramsey said.

EMarketer found that 65 percent to 70 percent of marketers are cutting their overall advertising budgets.

A whopping 48 percent to 59 percent of marketers will cut traditional media spend up to 85 percent.

"In the economy today, we could use a message of hope," Mr. Ramsey said. "This is the worst economy since the Great Depression.

"Ultimately, fear and panic can lead to inaction and eventually paralysis," he said.

Some marketers will do better than others, Mr. Ramsey said. It is important to take action to not only get through this economy, but thrive as well.

"Consumers will continue to buy, so marketers need to continue to market," Mr. Ramsey said.

According to Robert J. Coen, senior vice president and director of forecasting at Magna Global, the outlook is not good.

Magna is one of the world's largest media services firms. MAGNA works on behalf of the Interpublic Group's media specialists, including Universal McCann, Initiative Media and other IPG media shops around the world.

Spending growth in United States is in the negative numbers and 2008-2009 looks pretty bleak.

"What's worse about all of this is that not only do 70 percent of marketers expect to cut their budgets, 31 percent say they already have," Mr. Coen said.

Mobile and digital will grow
But mobile and other forms of digital may thrive through this economic downturn.

Marketers are cutting their traditional media budgets and investing more into digital.

A whopping 62 percent of marketers said they would be pulling dollars from traditional and placing them in digital.

Why?

An example would be Special K, a diet cereal brand from Kellogg Co.

Over last 18 months, Special K found its digital ROI surpassed traditional, Mr. Coen said.

"You have four options: succumb to fear, blind yourself to consumer data, stubbornly hold on to traditional ways of doing things, or come out fighting, innovate, see what works for your brand and be connected with consumers," Mr. Coen said.

Staff Reporter Dan Butcher reported.