Online Marketing Trends

by Cathy Reisenwitz

Successful businesses understand that the Web is taking over traditional media in terms of reach, influence, and overall ROI. Smart marketers are taking that understanding and applying it to their marketing budgets.

In the face of halted economic growth, ad dollars are migrating to the Internet. Google's April 2008 30% jump in net income for its first quarter according to the New York Times demonstrated this.

Marketers spent $21.1 billion on online advertising in the United States in 2007, up from $16.9 billion in 2006, according to e-Marketer. Google's stronghold, search advertising, makes up the majority of that spending.

This year online advertising is expected to grow to nearly $25.9 billion and account for 8.8% of total US ad spending according to an e-Marketer study.

A June 2008 report shows online marketing now makes up more than half of the average marketer's budget. More than 70% of firms incorporate search engine optimization, paid search and email marketing into their marketing plans.

A late 2007 BtoB Online survey showed that 79.1% of Business-to-Business marketers planned to increase their marketing budgets. The biggest increases were intended for online marketing. Last year 75.6% of marketers planned to increase their online budgets.

Online marketing makes up an average of 33.8% of the marketing budget, up from 26.5% in 2007. Web site development is where 74.0% of marketers want to spend their online dollars, 70.1% on e-mail; 64.3% on search engine marketing; 39.5% on video; 39.1% on webcasting; 36.4% on banners; 29.6% on sponsorships and 26.2% on social media. Social media will see an increase in marketing dollars this year, as 19.8% of marketers are already using social media as part of their marketing strategy.

A May 2008 Millward Brown Marketing Management Survey revealed that 75% of senior marketers expect to increase spending for new media and online initiatives next year. Advertising budgets are more stagnant, with only 33% of marketers expecting traditional ad budgets to increase, while 48% think they will stay the same and 20% expect a drop. Advertising was cited by 35% as most likely to see cuts, followed by point-of-purchase (29%), public relations (16%) and direct marketing (16%).

A recent e-Marketer article reveals that automakers, traditionally the biggest advertisers in the country, have cut US Q1 2008 advertising spending. The lone bright spot in auto ad spending is online. Internet spending was up 57.9% last year.

Coremetrics' annual "Face of the New Marketer" survey showed 78% of marketing professionals view social media marketing as a way to gain an edge on their competitors. Half of respondents plan to implement user-generated content or reviews, 22% plan to implement a blog, 20% intend to implement social networks, and another 20% plan to implement an RSS feed. Search Engine Optimization (SEO) was ranked as the number one priority over nine other choices, including email campaigns and online analytics. Email campaigns continue to demand most of a marketer's time (22% on average), while the biggest portion of budgets (33% on average) go to online advertising.

Research firm IDC found online ad spending has not seen the cutbacks other portions of marketers' budgets have seen in the country's economic slump, ClickZ reports. Revenue from online advertising is up 24% from 1Q07 in Q1 2008.

Eloqua found that while 35% of marketers anticipate a decrease in ad spend across the next three years, 23% admit to increasing ad spend on Google AdWords.

Most small businesses expect to invest in Web site design, SEO and e-mail marketing despite the slumping economy, according to Register.com's newly released May 2008 "Small Business Survey." When asked which areas of technology they are mostly likely to invest in, the top three answers were: Web site design (53%), SEO (43%) and e-mail marketing (41%). Seventy percent of those polled said they do not expect Web revenue to decline this year.