By Robert Pryce
Head of Online Marketing
Interactive marketing is fast becoming one of the most important and effective elements in the overall marketing mix. In a recent study sponsored by Havas and directed by London Business School, 908 chief marketing officers were contacted in the US, Japan, Germany, UK, France,
China and Brazil and questioned about their marketing spend between 2001 and projected 2004. The responses threw out some interesting results.
Media advertising remains constant while sales promotion, which accounts for about 20% of total marketing expenditure, is projected to increase slightly. Brand PR is to remain fairly constant while minimal growth is projected for direct mail. The most interesting aspect is the growth in the interactive category.
The interactive group is the fastest growing category with 9.3% growth in 2003, and a projected 11.6% growth in 2004. In a period where all other elements are remaining static or showing slight increases this is very encouraging.
This fits in with some recent reports that:
- 76 per cent of Web users primary activity online is search; this is equal to web based email (Source: National Statistics Internet Access Report, 2002)
- 550 million searches conducted per day worldwide. 50 per cent of these conducted within the US (Source: Overture)
- 70 per cent of all e-commerce transactions originate from a search (Source: Forrester/IAB)
- 60 per cent of Web users visit search sites every month (Source: NOP)
- Over 75 per cent of web users rely on search engines to find their way around the web (Source: RealNames survey/IAB)
- Online sales in the US in Q3'03 amounted to USD13.29bn, rising by 27 per cent compared to Q3'02. (Source US Department of Commerce)
- US Online Advertising Spend for 2003 was USD6.7bn (Source: eMarketer)
- Keyword search: USD301 million in 2002 - 144.0 per cent growth (Source: eMarketer)
- Rich media: USD178 million in 2002 - 8.6 per cent growth (Source: PWC)
- 3 per cent of ALL media spend is now online (Source: Jupiter)
Why is Online Marketing Spend Increasing?
Reach
No matter what size a company you operate having a web presence means you can be accessed from anywhere in the world.
Effectiveness
It has proven very effective in driving targeted traffic to your site
Return on Investment/Cost per Acquisition
The Internet has proven to provide one of the largest return on investments for companies. This is due to having one of the lowest cost per acquisition figures.
Measurability/Accountability
The Internet is able to provide a level of measurability that cannot be replicated in any other channel. For example Dell, the largest commerce site on the web, averages USD100m per week in revenue from its online sales activities all of which is 100 per cent trackable and accountable.
So, what are our overall predictions? The Internet is becoming one of the most important marketing tools/sales channels within the marketing mix. This will further improve with increased broadband penetration, increased awareness of the low cpa's available online versus offline, and the increased measurability of all online marketing campaigns.
