NEW YORK The looming economic downturn will inevitably lead to a decrease in ad spending, but marketers are likely to continue shifting money into social media, according to a new study.
According to the Forrester Research report, marketer moves into areas like word of mouth, blogging and social networking will withstand tightened budgets. In contrast, marketers are likely to decrease spending in traditional media and even online vehicles geared to building brand awareness.
Those findings stand in contrast to the previous economic downturn, when spending on Internet advertising cratered as marketers turned to tried-and-true media.
“Last time around, there was a lot of mindless investment in online,” said Forrester analyst Josh Bernoff. “People were dong it because their competition was doing it or because it looked cool. Those are good reasons to stop doing it when money tight.”
Today, companies are finding social media applications are useful marketing tools. Bernoff pointed out that a company setting up a blog or Facebook page won’t pay very mcuh, unlike the outlay for big-budget media campaigns. Even more complex community initiatives top off at $300,000. In many instances, these initiatives do not involve media spending.
“Placing ads in Facebook will suffer right along with placing ads on Yahoo! and in Time magazine,” he said. “That’s going to get cut across the board.”
Perhaps more important, Forrester sees more sophisticated marketers shifting their focus from building awareness to motivating consideration, a middle-of-the-funnel activity social media applications like discussion boards are ideally suited for.
At the same time, Forrester forecasts online direct response vehicles like search and e-mail marketing will gain market share because marketers can tie them to sales. The challenge for social media is to provide such measurable results, even if they fall short of clicks that lead to product purchases.
For example, Forrester found that Procter & Gamble’s BeingGirl.com, an online community for adolescent girls, is four times as effective as a similarly priced marketing program in traditional media. Initiatives like BeingGirl.com require a long-term commitment, Bernoff pointed out.
“There has been a lot of experimentation,” he said. “The time for that should be coming to an end soon. Experiments don’t tend to do well in an environment where money is tight.”