Gartner Outlines How Digital Can Survive Recession

Faced with an economy spiraling downward into recession and online spending at risk, what's an Internet executive to do?

Restate the case for digital media, make the most of existing assets, rethink your ad strategy and cut costs. Those are the steps prescribed by Gartner in a new report that serves as a sort of survival guide for online businesses during the downturn.

Forget the heady days of Bubble 2.0. "Most senior managers understand traditional media much better than new media," according to the report written by Adam Daum, a research vice president at Stamford, Conn.-based Gartner, an information and technology research and advisory firm. "Consequently, digital projects may be faced with a lack of new investment, or even budget cuts, and digital media executives need to decide how to respond."

Rather than lying low, digital bosses should reiterate the long-term value of new media to traditional media companies. "New media should be seen as an integral part of the overall strategy, rather than a collection of strange and risky new ventures that can be cut when budgets are tight," Daum wrote.

The research firm also advises online executives to pursue cross-promotional efforts between traditional and new media. TV shows, for example, should direct viewers to companion Web sites, while the sites should highlight upcoming episodes.

Since a large media company may operate a number of different sites, finding ways to cross-link content to boost visibility and audiences is also encouraged.

In adjusting advertising for leaner times, Gartner suggests turning to lower-cost, alternative formats including social media, branded entertainment marketing, paid product placements and "advergaming."

"For advertisers, social media marketing is relatively cheap, so it should be less prone to budget cuts than TV and print advertising," Daum wrote.

Gartner also suggests that traditional ad sales staff should be encouraged to include digital in their "bundles" to give them an edge and close more business.

Finally, to reduce overhead, online companies should consider using application service providers (ASPs) rather than building their own platforms. Because of the downturn, they should also try to negotiate pure revenue-sharing deals with ASPs that eliminate up-front costs altogether.

Dealing with "uncomprehending senior managers," digital executives "have a duty to convince them not to be distracted by penny-pinching measures in the face of short-term market conditions, but to embrace the digital future."

Gartner doesn't explain, however, how it knows the downturn will only be short-term.

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